PulteGroup, Inc. (PHM) Intrinsic Value & DCF Valuation
Residential Construction · NYSE
Current Price
$132.31
Intrinsic Value
$136.14
+2.8% margin of safety
What Is PulteGroup, Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of PulteGroup, Inc. (PHM) at $136.14 per share, compared with a market price of $132.31, a margin of safety of +2.8%. The base case assumes 4.4% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $108.44 to $168.15. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is PulteGroup, Inc. (PHM) Undervalued?
At $132.31, PHM trades about 2.8% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand Recognition and Reputation
PulteGroup benefits from strong brand recognition, particularly with its Del Webb active adult communities. This established reputation fosters trust and loyalty among homebuyers.
↑Scale and Operational Efficiency
As one of the largest homebuilders, PulteGroup achieves economies of scale in land acquisition, construction, and supply chain management. This leads to cost advantages and improved margins.
↑Diversified Product Portfolio
The company offers a range of home types and price points across multiple brands, catering to diverse buyer segments. This diversification reduces reliance on any single market niche.
INVESTMENT RISKS
↓Economic Downturn and Recession
A significant economic slowdown or recession could lead to widespread job losses and reduced consumer confidence. This would negatively impact housing demand and PulteGroup's sales.
↓Regulatory and Zoning Changes
Changes in local zoning laws, building codes, or environmental regulations can increase construction costs and timelines. This can also limit the availability of suitable land for development.
↓Competition from Other Builders
The residential construction industry is highly competitive. PulteGroup faces ongoing competition from national builders, regional players, and smaller custom home builders.
Base case
PHM base case valuation
Intrinsic Value
$136.14
Margin of safety
+2.8%
Expected annual return
+0.6%
Base case assumptions: 4.4% annual growth, 10.0% discount rate, 17x exit multiple, 5 year projection. Data as of 2026-07-29.
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. engages in the homebuilding business. The firm is also involved in mortgage banking and title and insurance brokerage operations. It operates through the Homebuilding and Financial services business segments. The Homebuilding segment includes operations from Connecticut, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Virginia, Georgia, North Carolina, South Carolina, Tennessee, Florida, Illinois, Indiana, Kentucky, Michigan, Minnesota, Missouri, Ohio, Texas, Arizona, California, Nevada, New Mexico, and Washington. The Financial Services segment is composed of mortgage banking and title operations. The company was founded by William J. Pulte in 1950 and is headquartered in Atlanta, GA.
Financial Metrics — PHM Stock Valuation Data
Revenue/Share (TTM)
$85.58
FCF/Share (TTM)
$7.89
ROIC (TTM)
11.6%
ROE (TTM)
14.7%
P/FCF
16.9x
EV/EBITDA
11.0x
FCF Yield
5.92%
Debt/Equity
0.18x
On a trailing twelve-month basis, PHM generates free cash flow per share of $7.89 alongside a ROIC of 11.6%, both central inputs for a DCF valuation. Its P/FCF ratio of 16.9x and FCF yield of 5.92% then frame how PHM is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of PHM?
PulteGroup, Inc. currently generates $7.89 in free cash flow per share. At the current price of $132.31, 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 16.9x with a free cash flow yield of 5.92%. This P/FCF is in a moderate range. 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 ($7.89) 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 0.18x, 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 11.6% 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 0.18x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 11.0x, 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 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.