Why Is PulteGroup (PHM) Up 2.4% Since Last Earnings Report?

It has been about a month since the last earnings report for PulteGroup (PHM). Shares have added about 2.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PulteGroup due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

PulteGroup Q2 Earnings & Revenues Beat Estimates, New Orders Up Y/Y

PulteGroup reported better-than-expected second-quarter 2026 results, with adjusted earnings and total revenues topping the Zacks Consensus Estimate, but declining year over year.

The quarterly results reflect reduced home-closing volumes, softer average selling prices (ASP) and margin compression. Ongoing softness in the housing market because of weaker consumer confidence and ongoing affordability challenges due to high mortgage rates hurt the top-line growth.

Inside PulteGroup’s Q2 Headlines

Quarterly earnings were $2.48 per share, beating the Zacks Consensus Estimate of $2.38 by 4.2%. Earnings declined 18.2% from $3.03 in the prior-year quarter.

Total revenues (Homebuilding & Financial Services) of $3.983 billion edged past the consensus mark of $3.980 billion by 0.1% but fell 9.6% year over year.

PulteGroup’s Homebuilding Highlights

Homebuilding segment’s revenues decreased 9.7% year over year to $3.89 billion. Home sale revenues fell 10.8% to $3.81 billion, reflecting weaker delivery volumes and lower average pricing. Land sale and other revenues increased to $78.9 million from $34.6 million.

The number of homes closed declined 8.4% year over year to 6,997 units. Deliveries decreased across the Northeast, Midwest, Texas and West regions, while closings in the Southeast and Florida remained relatively stable. The ASP of homes delivered fell 2.7% to $544,000 from $559,000.

Net new orders increased 6.4% year over year to 7,536 homes. Order growth was recorded across all buyer groups, supported by an 8% increase in average community count to 1,074. The dollar value of net new orders rose 5.1% to $4.08 billion.

PulteGroup ended the quarter with a backlog of 10,966 homes, up 1.7% from the prior-year level. Backlog units increased in the Northeast, Florida, Midwest and Texas, while the Southeast and West reported declines. The value of homes in backlog slipped 0.6% to $6.80 billion. The divergence between higher units and lower value indicates that the average value of homes in backlog declined year over year, consistent with the company’s broader pricing pressure.

Home sale gross margin contracted 200 basis points (bps) year over year to 25%. However, the metric improved 60 basis points sequentially from the first quarter of 2026, indicating some near-term stabilization in profitability.

Selling, general and administrative (SG&A) expenses declined to $383 million from $390 million. However, as a percentage of home sale revenues, SG&A expenses increased 100 bps to 10.1%, as the lower revenue base reduced operating leverage.

PulteGroup’s Financial Services Details

Financial Services revenues declined 4.2% to $96.9 million. Overall, the revenue mix reflected continued housing-market pressure as affordability constraints, volatile mortgage rates and economic uncertainty affected buyer activity.

Mortgage origination volume decreased to 4,629 loans from 4,984, while origination principal fell to $1.98 billion from $2.16 billion. The mortgage capture rate improved modestly to 85.2% from 84.8%.

PHM’s Liquidity and Buybacks Stay in Focus

PulteGroup ended the quarter with $1.38 billion in cash, cash equivalents and restricted cash. Notes payable totaled $1.82 billion, resulting in a debt-to-capital ratio of 12.3% and a net debt-to-capital ratio of 3.3%.

Operating cash flow for the first six months of 2026 declined 58.1% year over year to $176.8 million, partly reflecting an $807.3 million increase in inventories. During the second quarter, PHM repurchased 3.1 million shares for $373 million. First-half repurchases totaled $681.2 million, representing 5.5 million shares.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, PulteGroup has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of D. 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. Notably, PulteGroup has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

PulteGroup belongs to the Zacks Building Products - Home Builders industry. Another stock from the same industry, D.R. Horton (DHI), has gained 3.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

D.R. Horton reported revenues of $9.23 billion in the last reported quarter, representing a year-over-year change of +0%. EPS of $3.20 for the same period compares with $3.36 a year ago.

D.R. Horton is expected to post earnings of $3.10 per share for the current quarter, representing a year-over-year change of +2%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.5%.

D.R. Horton has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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