DCF Studio

    PHM · NYQ · Consumer Cyclical

    PulteGroup, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 171.31

    Market price

    USD 131.29

    Implied upside

    +30.5%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.66% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of 0.5%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 171.31+30.5%
    Exit multiple
    USD 150.93+15.0%
    Market price
    USD 131.29

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 15.5bnUSD 15.7bnUSD 15.9bnUSD 16.2bnUSD 16.5bnUSD 16.8bnUSD 17.1bnUSD 17.5bnUSD 17.9bnUSD 18.3bn+1.9%
    EBITUSD 3.2bnUSD 3.2bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.6bnUSD 3.7bn+1.9%
    NOPATUSD 2.5bnUSD 2.5bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.8bnUSD 2.9bnUSD 3.0bn+1.9%
    Add depreciation & amortisationUSD 81.2mUSD 82.2mUSD 83.4mUSD 84.7mUSD 86.1mUSD 87.7mUSD 89.5mUSD 91.4mUSD 93.6mUSD 95.9m+1.9%
    Less capital expenditureUSD -155.3mUSD -182.0mUSD -209.6mUSD -238.4mUSD -268.4mUSD -299.9mUSD -332.9mUSD -367.8mUSD -404.6mUSD -443.7m+12.4%
    Capex, % of revenue1.0%1.2%1.3%1.5%1.6%1.8%1.9%2.1%2.3%2.4%-
    Less increase in working capitalUSD 892.3mUSD -94.5mUSD -108.3mUSD -122.6mUSD -137.4mUSD -152.9mUSD -169.2mUSD -186.3mUSD -204.4mUSD -223.5m-
    Free cashflow to firmUSD 3.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.4bn-3.6%
    Discount factor0.95710.87670.80300.73550.67370.61710.56530.51780.47430.4344-
    Present valueUSD 3.2bnUSD 2.0bnUSD 1.9bnUSD 1.7bnUSD 1.6bnUSD 1.4bnUSD 1.3bnUSD 1.2bnUSD 1.1bnUSD 1.0bn-
    Present Value Of The ForecastUSD 16.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.120Reported 1.179, pulled toward 1.0 (Blume)
    Cost of equity9.63%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 4923.3x interest cover. Book interest / average debt was lower, at 0.0%.
    Market capitalisationUSD 25.0bn91.6% of capital
    Total debtUSD 2.3bn8.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.17%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 171.31

    51% of EV

    Forecast FCFF, final year
    USD 2.4bn
    Capex at depreciation, working capital in reinvestment
    USD 3.0bn
    Less reinvestment at g/ROIC (11.8% of NOPAT)
    USD -347.8m
    Capitalised
    USD 2.6bn
    ROIC (reported)
    21.2%
    Terminal value, undiscounted
    USD 40.0bn
    Terminal value, discounted
    USD 17.4bn
    Enterprise value
    USD 33.9bn
    Less net debt
    USD -297.9m
    Equity value
    USD 34.2bn

    Exit at 8.0x EBITDA

    Value per shareUSD 150.93

    45% of EV

    Terminal value, undiscounted
    USD 30.6bn
    Terminal value, discounted
    USD 13.3bn
    Enterprise value
    USD 29.8bn
    Less net debt
    USD -297.9m
    Equity value
    USD 30.1bn

    Spread between methods: 13%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.17%220.26228.66239.05252.13269.00
    8.17%188.50193.35199.20206.34215.18
    9.17%165.06167.91171.31175.38180.30
    10.17%147.05148.71150.68153.03155.84
    11.17%132.80133.71134.82136.14137.72

    Outlined: this model. Green text: above today's price of 131.29. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.7%0.6%-3.8%
    EBIT margin21.7%20.4%15.6%
    Discount rate-9.2%11.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.