A month has gone by since the last earnings report for PulteGroup (PHM). Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is PulteGroup due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for PulteGroup, Inc. before we dive into how investors and analysts have reacted as of late.
PulteGroup's Q3 Earnings & Revenues Beat, Net New Orders Down Y/Y
PulteGroup has reported better-than-expected third-quarter 2025 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate. However, the metrics declined year over year.
The performance of the company was hurt during the quarter due to the current softness in the housing market because of weaker consumer confidence and ongoing affordability challenges. Moreover, increases in direct costs related to home and land sales hurt the bottom line, alongside a decline in revenues.
The company remains optimistic about the lowered interest rates; however, the improvements in buyers' demand are still far from normalizing, given the market uncertainties. With a diversified business platform, it aims to counter the macro challenges and position itself for better growth prospects in the upcoming period.
Inside PulteGroup’s Q3 Headlines
PulteGroup reported adjusted earnings of $2.96 per share, which topped the Zacks Consensus Estimate of $2.86 by 3.5%. In the year-ago quarter, the company reported adjusted earnings per share of $3.35.
Total revenues (Homebuilding & Financial Services) of $4.4 billion also surpassed the consensus mark of $4.3 billion by 2.3% but declined 1.6% from the year-ago figure of $4.48 billion.
Segmental Discussion of PulteGroup
PulteGroup primarily operates through two business segments — Homebuilding and Financial Services.
Homebuilding: Revenues from this segment were down 1.4% year over year to $4.3 billion. Home sale revenues decreased 2.2% year over year to $4.25 billion. Land sales and other revenues increased 175.7% to $53.2 million from a year ago.
The number of homes closed dropped 5% to 7,529 units from the year-ago level. The ASP of homes delivered was $564,000, up 2.9% year over year. Net new home orders declined 5.6% year over year to 6,638 units. Also, the value of net new orders declined 7.4% from a year ago to $3.64 billion.
At the end of the third quarter, PulteGroup’s backlog, which represents orders yet to be closed, was 9,888 units, down 18.2% from a year ago. In addition, potential housing revenues from the backlog were down 19% year over year to $6.23 billion from $7.69 billion.
Home sales gross margin was down 260 basis points (bps) year over year to 26.2%. SG&A expenses (as a percentage of home sales revenues) remained flat at 9.4% year over year.
Financial Services: Revenues from this segment dropped 9.3% year over year to $103.3 million. Pretax income for the segment declined to $44 million from $55 million a year ago, due to lower closing volumes in the company’s homebuilding operations, alongside a downtrend in the mortgage capture rate to 84% from 87% last year.
Sneak Peek at PulteGroup’s Financials
At the end of the third quarter, PulteGroup’s cash, cash equivalents and restricted cash were $1.48 billion, down from $1.65 billion at the end of 2024. Net debt-to-capital was 1.1% at the third-quarter end against (0.3)% at 2024-end.
As of the first nine months of 2025, net cash provided by operating activities was $1.1 billion, down from $1.11 billion in the prior-year period.
In the first nine months of 2025, the company repurchased 8.2 million common shares for $900 million at an average price of $109.81 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, PulteGroup has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock has a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, PulteGroup has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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PulteGroup, Inc. (PHM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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