Residential Construction · NYSE
Current Price
$109.31
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on PulteGroup, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods brand names. As of December 31, 2021, it controlled 228,296 lots, of which 109,078 were owned and 119,218 were under land option agreements. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was formerly known as Pulte Homes, Inc. and changed its name to PulteGroup, Inc. in March 2010. The company was founded in 1950 and is headquartered in Atlanta, Georgia.
ROIC (TTM)
13.3%
ROE (TTM)
15.9%
FCF Yield
7.90%
Based on trailing twelve-month data, PHM shows a free cash flow per share of N/A and a ROIC of 13.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 7.90% are important context metrics when evaluating PHM's stock valuation relative to peers.
The intrinsic value of PHM depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether PHM is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $109.31. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on PulteGroup, Inc.: (1) Start with the trailing free cash flow per share 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, and (4) add a terminal value for cash flows beyond the projection period.
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 Residential Construction will produce over the next 5-10 years, then discounting those amounts to today's dollars. PHM's ROIC of 13.3% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PHM, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
