PulteGroup Inc Stock Hold Recommendation Reiterated (PHM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- PulteGroup (NYSE: PHM) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, premium valuation and poor profit margins.

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Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 29.1%. Since the same quarter one year prior, revenues rose by 14.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PULTEGROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PULTEGROUP INC continued to lose money by earning -$0.55 versus -$2.90 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus -$0.55).
  • The debt-to-equity ratio of 1.46 is relatively high when compared with the industry average, suggesting a need for better debt level management.

PulteGroup, Inc., through its subsidiaries, engages in homebuilding and financial services businesses primarily in the United States. PulteGroup has a market cap of $6.87 billion and is part of the industrial goods sector and materials & construction industry. The company has a P/E ratio of 42.3, above the S&P 500 P/E ratio of 17.7. Shares are up 181.8% year to date as of the close of trading on Friday.

You can view the full PulteGroup Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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