PulteGroup, Inc. (PHM) Stock Valuation — DCF Analysis
Residential Construction · NYSE
Current Price
$123.17
Intrinsic Value
$108.44
-13.6% margin of safety
COMPETITIVE MOAT
↑Brand Recognition & Scale
PulteGroup benefits from strong brand recognition across its various homebuilding names. Its significant scale allows for operational efficiencies and purchasing power, creating a cost advantage.
↑Land Acquisition Expertise
The company's ability to strategically acquire and develop land in desirable locations is a key differentiator. This foresight secures future inventory and limits competition.
↑Diversified Product Offerings
PulteGroup offers a range of home types and price points catering to different buyer segments. This diversification reduces reliance on any single market niche.
INVESTMENT RISKS
↓Interest Rate Sensitivity
The housing market is highly sensitive to interest rates. Rising rates can significantly impact affordability and dampen demand for new homes.
↓Regulatory & Permitting Hurdles
Navigating complex and evolving local zoning laws and permitting processes can lead to project delays and increased costs. These can vary significantly by region.
↓Competition & Market Cycles
The residential construction industry is cyclical and highly competitive. Economic downturns or increased competition can pressure margins and sales volumes.
Base case
PHM base case valuation
A base case discounted cash flow model for PHM estimates an intrinsic value of about $108.44 per share, against a current price of $123.17. The model assumes 0.2% annual free cash flow growth, a 10.0% discount rate, and a 14x exit multiple.
Intrinsic Value
$108.44
Margin of safety
-13.6%
Expected annual return
-2.5%
Base case assumptions: 0.2% annual growth, 10.0% discount rate, 14x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PHM valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for PulteGroup, Inc. respond.
Open DCF Calculator for PHMCompany Overview
PulteGroup, Inc. operates as a leading American homebuilder, primarily focusing on acquiring and developing land for residential purposes, followed by the construction of various types of homes across the United States. Its diverse portfolio encompasses a range of housing designs, including single-family detached residences, townhouses, condominiums, and duplexes, marketed under well-known brand names such as Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods. As of December 31, 2021, PulteGroup managed an extensive land inventory totaling 228,296 lots, with 109,078 parcels owned outright and an additional 119,218 secured through land option agreements. Beyond its core construction activities, the company provides comprehensive financial services to its homebuyers, including originating mortgage loans and subsequently selling their servicing rights, as well as offering essential title insurance, examination, and closing services. Established in 1950, the company, initially known as Pulte Homes, Inc., adopted its current name, PulteGroup, Inc., in March 2010 and maintains its corporate headquarters in Atlanta, Georgia.
Financial Metrics — PHM Stock Valuation Data
Revenue/Share (TTM)
$87.78
FCF/Share (TTM)
$8.58
ROIC (TTM)
13.3%
ROE (TTM)
15.9%
P/FCF
14.3x
EV/EBITDA
8.6x
FCF Yield
7.01%
Debt/Equity
0.19x
Based on trailing twelve-month data, PHM shows a free cash flow per share of $8.58 and a ROIC of 13.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 14.3x and FCF yield of 7.01% are important context metrics when evaluating PHM's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of PHM?
PulteGroup, Inc. currently generates $8.58 in free cash flow per share. At the current price of $123.17, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is PHM undervalued?
PHM trades at a P/FCF ratio of 14.3x with a free cash flow yield of 7.01%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether PHM is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value PHM stock using DCF?
To perform a DCF valuation on PulteGroup, Inc.: (1) Start with the trailing free cash flow per share ($8.58) as the base, (2) project future FCF growth over 5-10 years based on Residential Construction industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PHM's risk profile — with a debt-to-equity of 0.19x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to PHM?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For PulteGroup, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Residential Construction trends, then discounting those amounts to today's dollars. PHM's ROIC of 13.3% shows moderate capital returns.
How does WACC affect PHM stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PHM, with a debt-to-equity ratio of 0.19x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 8.6x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See PHM PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value PHM with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.