PulteGroup (PHM) Stock Forecast & Price Target

PulteGroup
Bear Case

Investors should be bearish about investing in PulteGroup, Inc. for these reasons:

• Third-quarter 2026 earnings of $2.53 per share missed the consensus estimate of $2.63, and revenue of $3.97 billion fell short of the $4.15 billion expected, indicating that the company is underperforming relative to Wall Street expectations.
• Home sale revenue fell 9% year over year to $3.9 billion, driven by a 9% decline in closings to 6,876 homes, reflecting a significant slowdown in demand as higher mortgage rates and weaker consumer confidence reduced buyer traffic.
• First-time buyers, who are most affected by higher interest rates, saw net new orders decline 9% year over year, while move-up buyer orders fell 14%, suggesting that the core customer base for new home construction is facing significant affordability challenges.
• The company expects fourth-quarter gross margins of 24.0% to 24.5%, down from 24.8% in the third quarter, as it factors in the expected mix of homes closing and incentives associated with selling spec homes, indicating continued pressure on profitability.
• Full-year SG&A expense is now expected to be 10.3% to 10.5% of home sale revenues, reflecting lower expected closings and less operating leverage as communities take longer to close out, which will further impact the bottom line.