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PulteGroup (PHM) Gains But Lags Market: What You Should Know

PulteGroup (PHM) closed at $55.02 in the latest trading session, marking a +0.22% move from the prior day. This move lagged the S&P 500's daily gain of 0.28%. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq gained 0.14%.

Heading into today, shares of the homebuilder had gained 1.93% over the past month, outpacing the Construction sector's loss of 4.45% and the S&P 500's gain of 0.12% in that time.

Investors will be hoping for strength from PulteGroup as it approaches its next earnings release, which is expected to be February 1, 2022. The company is expected to report EPS of $2.33, up 56.38% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.25 billion, up 33.03% from the year-ago period.

Investors should also note any recent changes to analyst estimates for PulteGroup. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. PulteGroup is currently a Zacks Rank #3 (Hold).

Investors should also note PulteGroup's current valuation metrics, including its Forward P/E ratio of 6.28. Its industry sports an average Forward P/E of 5.7, so we one might conclude that PulteGroup is trading at a premium comparatively.

Investors should also note that PHM has a PEG ratio of 0.26 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Home Builders industry currently had an average PEG ratio of 0.26 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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