Is PHM a good stock to buy? We came across a bullish thesis on PulteGroup, Inc. on InfoArb Sheets’s Substack. In this article, we will summarize the bulls’ thesis on PHM. PulteGroup, Inc.’s share was trading at $122.78 as of June 9th. PHM’s trailing and forward P/E were 11.87 and 12.24 respectively according to Yahoo Finance.
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PulteGroup, Inc. (NYSE: PHM) is a U.S. homebuilder operating across 45 markets through brands such as Pulte Homes, Centex, Del Webb, DiVosta, and John Wieland, with a business model spanning move-up, first-time, and active adult buyers, though recent strength is increasingly concentrated in higher-income segments that provide more resilient demand.
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In Q1 2026, the company reported revenue of $3.41 billion versus $3.89 billion a year ago and GAAP EPS of $1.79 versus $2.57, reflecting cyclical pressure from higher incentives and softer affordability-driven absorption, but underlying story is more constructive as orders grew, spec inventory fell 24% in 90 days, and management reaffirmed confidence gross margins are expected to bottom in Q2 before improving through the second half of 2026.
The company is actively shifting back toward a build-to-order model, at 43% versus a 60% historical target, which creates an embedded margin recovery lever as discount-heavy spec closings roll off. Regional strength in Florida, where orders rose 18% across markets, highlights uneven durable demand pockets, while move-up and active adult buyers continue to anchor performance even as first-time buyer affordability remains challenged.
PulteGroup maintains balance sheet strength with $1.8 billion in cash and effectively zero net debt-to-capital, enabling continued buybacks, land investment discipline, and buyer support without financial strain. With easing land inflation, improving inventory quality, and a de-risked guidance backdrop, the company is positioned for earnings and margin inflection, making the current period a transitional trough that sets up a stronger profitability and cash flow trajectory into 2026 and beyond.
Previously, we covered a bullish thesis on D.R. Horton, Inc. (DHI) by Let it Compound in May 2025, which highlighted decentralized model, and resilient fundamentals. DHI’s stock price has appreciated by approximately 20.13% since our coverage. InfoArb Sheets shares a similar view but emphasizes PulteGroup’s margin recovery through build-to-order shift, spec inventory reduction, and earnings inflection into 2026.
PulteGroup, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held PHM at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the risk and potential of PHM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PHM and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
