GET DAILY SIGNALSPulteGroup (PHM) Q3 Earnings Show Revenue Miss and Margin Pressure in Tough Housing Market
Key Takeaways
- PulteGroup reported third-quarter net income of $476 million, or $2.53 per diluted share, down from $2.96 per share a year earlier.
- Total revenue fell 9.8% year over year to $3.97 billion, missing analyst consensus estimates of roughly $4.15 billion.
- Home sale gross margin narrowed to 24.8% from 26.2% a year ago, partly reflecting $26 million in land impairments.
- Net new orders declined 6% to 6,208 homes, while quarter-end backlog rose 4% to 10,298 homes.
- The company repurchased 2.8 million shares for $350 million and ended the quarter with $1.4 billion in cash.
- Shares fell roughly 6% to 7% immediately after the release.
Why This Earnings Report Matters
PulteGroup’s third-quarter results arrive at an important time for the U.S. homebuilding sector. Higher mortgage rates, persistent inflation, and weaker consumer sentiment have softened buyer demand, so this release serves as a useful gauge of housing-market conditions. In my view, the numbers highlight how the company’s focus on move-up and active-adult segments helps support margins even when sales slow. The guidance on closings and margins also gives investors a clearer picture of what to expect across the sector through year-end.
A Closer Look at the Reported Numbers
For the quarter ended September 30, 2026, PulteGroup posted net income of $476 million, or $2.53 per diluted share, versus $586 million, or $2.96 per share, in the same period last year. Results came in below the consensus estimate of roughly $2.62 per share. Total revenue reached $3.97 billion, down 9.8% from a year earlier and below expectations near $4.15 billion. Home sale revenue slipped 9% to $3.9 billion as closings fell 9% to 6,876 homes and average sales price eased 1% to $561,000.
Home sale gross margin was 24.8%, compared with 26.2% previously, after $26 million in land impairments that weighed on the figure by about 70 basis points. SG&A expenses totaled $397 million, or 10.3% of home sale revenue, up from 9.4% last year. The financial services segment contributed $46 million in pre-tax income at an 85% mortgage capture rate. I also checked this using Tickeron’s AI Screener to see how the stock compares with others in the industry.
Market Reaction and Investor Sentiment
Shares of PulteGroup declined about 6% to 7% in the session after the release, reflecting disappointment over the misses. The reaction points to concerns about softer demand, as management cited a 14% year-over-year drop in community traffic, especially among first-time buyers. While gross margins held up reasonably well versus some peers and backlog remained steady, weaker closings and order trends pressured sentiment. The results underscore the balance investors see between the company’s margin discipline and the affordability challenges affecting the broader market.
Forward Outlook and Factors to Monitor
Looking ahead, PulteGroup expects to close 7,000 to 7,500 homes in the fourth quarter, for full-year closings of 27,000 to 27,500 homes. Management guided to an average sales price of $550,000 to $560,000 and gross margins of 24.0% to 24.5% for the quarter. Several items stand out for investors. Mortgage-rate trends will remain key, given the impact already seen on traffic and first-time buyer activity. The company’s success converting speculative inventory into closings will also influence whether it hits guidance. Construction costs, which are down 5% year over year, offer some offset to margin pressure. Finally, the land strategy, with roughly $5.3 billion planned for acquisition and development in 2026 and an option-heavy lot portfolio, should support longer-term positioning. Strong cash and ongoing buybacks provide flexibility, though near-term performance will depend on how demand reacts to interest rates. From what I see, monitoring these developments closely will be important.
Using AI Tools to Refine Analysis
In my research process, I frequently rely on Tickeron’s AI Screener to quickly filter homebuilder stocks by fundamentals, technical patterns, and performance metrics. The tool helps surface relevant comparisons and trade ideas without hours of manual work, which is especially useful after earnings season when many names move at once.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
PHM's Indicator enters downward trend
The Aroon Indicator for PHM entered a downward trend on October 21, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 146 similar instances where the Aroon Indicator formed such a pattern. In 90 of the 146 cases the stock moved lower. This puts the odds of a downward move at 62%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 50-day moving average for PHM moved below the 200-day moving average on October 07, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PHM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where PHM's RSI Oscillator exited the oversold zone, 12 of 16 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 75%.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 39 of 57 cases where PHM's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 68%.
The Momentum Indicator moved above the 0 level on October 21, 2026. You may want to consider a long position or call options on PHM as a result. In 68 of 93 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 73%.
The Moving Average Convergence Divergence (MACD) for PHM just turned positive on October 16, 2026. Looking at past instances where PHM's MACD turned positive, the stock continued to rise in 35 of 50 cases over the following month. The odds of a continued upward trend are 70%.
Following a +3.84% 3-day Advance, the price is estimated to grow further. Considering data from situations where PHM advanced for three days, in 212 of 304 cases, the price rose further within the following month. The odds of a continued upward trend are 70%.
PHM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 18 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 32 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Profit vs. Risk Rating rating for this company is 39 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock slightly better than average.
The Tickeron SMR rating for this company is 57 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 59 (best 1 - 100 worst), indicating steady price growth. PHM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 73 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.652) is normal, around the industry mean (1.685). P/E Ratio (11.449) is within average values for comparable stocks, (7.941). Projected Growth (PEG Ratio) (0.995) is also within normal values, averaging (1.217). Dividend Yield (0.009) settles around the average of (0.019) among similar stocks. P/S Ratio (1.393) is also within normal values, averaging (24.205).
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a company which engages in the homebuilding business
Industry Homebuilding
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