PulteGroup’s fourth quarter saw a positive market reaction as the company delivered revenue above Wall Street’s expectations, despite notable declines in both sales and profit margins. Management attributed the quarter’s performance to continued strength in its geographically diverse operations—especially in the Midwest, Northeast, and Florida—where demand has held up better than in Texas and Western markets. CEO Ryan Marshall emphasized the benefits of the company’s diversified buyer base, noting a 14% year-over-year increase in active adult sign-ups in the quarter. He also highlighted that Del Webb communities, which target active adults, generated the highest gross margins and played a key role in offsetting softness among first-time and move-up buyers.
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PulteGroup (PHM) Q4 CY2025 Highlights:
- Revenue: $4.61 billion vs analyst estimates of $4.35 billion (6.3% year-on-year decline, 6% beat)
- Adjusted EPS: $2.88 vs analyst estimates of $2.81 (2.6% beat)
- Adjusted EBITDA: $781.8 million vs analyst estimates of $787 million (17% margin, 0.7% miss)
- Operating Margin: 16.3%, down from 23.5% in the same quarter last year
- Backlog: $5.27 billion at quarter end, down 18.9% year on year
- Market Capitalization: $26.23 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From PulteGroup’s Q4 Earnings Call
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John Lovallo (UBS) asked how PulteGroup managed SG&A expenses despite lower sales, to which CEO Ryan Marshall explained that only targeted reductions were made in slower markets, with ongoing investments in quality and customer experience.
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Michael Rehaut (JPMorgan Chase) questioned the sustainability of gross margin guidance, especially given rising land costs. Marshall stated the outlook assumes flat average sales prices and persistent incentives, with only a slight reduction in construction costs.
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Sam Reid (Wells Fargo) sought details on the increased incentives used to clear speculative inventory. CFO James Ossowski clarified that incentives primarily involved price cuts on spec homes, while financing incentives remained stable.
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Alan Ratner (Zelman and Associates) probed the margin differential between built-to-order and speculative homes. Marshall responded that built-to-order homes carry “hundreds of basis points higher gross margins” due to greater customer customization and option sales.
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Anthony Pettinari (Citigroup) asked about the impact of government policies on institutional buyers in single-family markets. Marshall said such policies are unlikely to materially affect PulteGroup, as the company’s exposure to build-for-rent remains minimal.
Catalysts in Upcoming Quarters
As we look to the next few quarters, the StockStory team will monitor (1) the pace of transition to a higher share of built-to-order homes and the resulting impact on gross margins, (2) the evolution of sales incentives as market conditions and affordability shift, and (3) demand trends across key regions, especially Florida and the active adult segment. The company’s ability to manage rising land costs and execute on new community growth will also be important signposts.
PulteGroup currently trades at $132.75, up from $123.27 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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