PulteGroup’s (NYSE:PHM) Q3 CY2025 Sales Beat Estimates

Homebuilding company PulteGroup (NYSE:PHM) beat Wall Street’s revenue expectations in Q3 CY2025, but sales fell by 1.6% year on year to $4.4 billion. Its non-GAAP profit of $2.96 per share was 2.5% above analysts’ consensus estimates.

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Company Overview

Having delivered over 850,000 homes since its founding in 1950, PulteGroup (NYSE:PHM) is one of America's largest homebuilders, constructing single-family homes, townhouses, and condominiums for first-time, move-up, and active adult buyers across 46 markets in 25 states.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, PulteGroup’s 10.4% annualized revenue growth over the last five years was solid. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. PulteGroup’s recent performance shows its demand has slowed as its annualized revenue growth of 2.3% over the last two years was below its five-year trend.

PulteGroup also reports its backlog, or the value of its outstanding orders that have not yet been executed or delivered. PulteGroup’s backlog reached $6.23 billion in the latest quarter and averaged 8.2% year-on-year declines over the last two years. Because this number is lower than its revenue growth, we can see the company hasn’t secured enough new orders to maintain its growth rate in the future.

This quarter, PulteGroup’s revenue fell by 1.6% year on year to $4.4 billion but beat Wall Street’s estimates by 2.2%.

Looking ahead, sell-side analysts expect revenue to decline by 6.2% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will face some demand challenges.

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Operating Margin

PulteGroup has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 20.2%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Looking at the trend in its profitability, PulteGroup’s operating margin rose by 1.4 percentage points over the last five years, as its sales growth gave it operating leverage. Its expansion was impressive, especially when considering most Home Builders peers saw their margins plummet.

This quarter, PulteGroup generated an operating margin profit margin of 17.3%, down 2.6 percentage points year on year. Since PulteGroup’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

PulteGroup’s EPS grew at an astounding 22.1% compounded annual growth rate over the last five years, higher than its 10.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into PulteGroup’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, PulteGroup’s operating margin declined this quarter but expanded by 1.4 percentage points over the last five years. Its share count also shrank by 26.3%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For PulteGroup, EPS didn’t budge over the last two years, a regression from its five-year trend. We hope it can revert to earnings growth in the coming years.

In Q3, PulteGroup reported adjusted EPS of $2.96, down from $3.35 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 2.5%. Over the next 12 months, Wall Street expects PulteGroup’s full-year EPS of $12.06 to shrink by 10.8%.

Key Takeaways from PulteGroup’s Q3 Results

We enjoyed seeing PulteGroup beat analysts’ adjusted operating income expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its backlog missed and its EBITDA fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock remained flat at $119.08 immediately after reporting.

Is PulteGroup an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.