PulteGroup, Inc. PHM is still waiting for a housing recovery. This Zacks Rank #5 (Strong Sell) is expected to see earnings decline in 2026 for the second year in a row.
PulteGroup is the third largest homebuilder in the United States with operations in 26 states and over 45 major markets. It’s portfolio of brands includes Centex, Pulte Homes, Del Webb, DiVosta, and John Wieland Homes and Neighborhoods.
PulteGroup serves 38% first-time buyers, 40% move-up, and 22% active adult.
PulteGroup Missed on Earnings in the Third Quarter of 2026
On Oct 22, 2026, PulteGroup reported third quarter 2026 results and missed on the Zacks Consensus by $0.10. Earnings were $2.53 versus the Consensus of $2.63.
It has missed twice in the last four quarters.
Revenue fell 9% to $3.9 billion from $4.2 billion a year ago. The revenue was impacted by a 9% decrease in closings to 6,876 homes, in combination with a 1% decrease in the average sales price of closed homes to $561,000.
Gross margin, the key component for homebuilders, fell to 24.8% from 26.2% in the third quarter of 2025. While the gross margin did fall, a gross margin over 20%, for a homebuilder, is still bullish. A bear market is usually gross margin under 20%.
60% of its business is now focused on the move-up buyer and active adults, which allows it diversification during these tougher times for first time buyers.
“The rapid increase in interest rates has stretched affordability even further, made selling an existing home even harder, and has pushed even more consumers to the sidelines,” said Ryan Marshall, CEO.
“Within this environment, we continue to appropriately balance the price and pace of home sales, align production accordingly, and remain disciplined in our allocation of capital,” he added.
Analysts Are Bearish on PulteGroup for 2026 and 2027
With mortgage rates still elevated, it’s unclear when the housing market is going to see a recovery. PulteGroup’s gross margins are also on the decline.
It’s not surprising, then, that analysts are cutting their earnings estimates for 2026 and also 2027.
Five estimates were cut for 2026 in the last 30 days. It has pushed down the Zacks Consensus to $9.51 from $10.12 in the last 60 days. That’s an earnings decline of 16.9% as the company made $11.44 in 2025.
Five estimates were also cut in the last 30 days for 2027. The Zacks Consensus has fallen to $9.63 from $11.11 in the prior month. That’s only a 1.3% gain year-over-year as the 2026 consensus now sits at $9.51.
To recap: earnings declined 22.1% in 2025. They are expected to fall 16.9% in 2026 and grow just 1.3% in 2027. Here’s what it looks like on the price and consensus chart.
Image Source: Zacks Investment Research
Shares of PulteGroup Hang On
While the AI stocks sold off in the last month, PulteGroup did the opposite. The 10-year treasury came back down under 5.00% and that means lower mortgage rates. Usually this stimulates homebuying.
As a result, shares of PulteGroup are up 13.4% over the last month. They also remain higher year-to-date by 12%.
While earnings are on the decline, the shares have been trading in a narrow range the last few years. They haven't broken down.
Image Source: Zacks Investment Research
PulteGroup is cheap with a forward price-to-earning (P/E) ratio of 13. A P/E ratio under 15 usually indicates a company is undervalued.
It is shareholder-friendly, paying a dividend which is currently yielding 0.8%.
It’s a tough market for homebuilders in 2026. For investors interested in getting in on PulteGroup, you might want to wait for the earnings estimates to turn around and the Zacks Rank to improve.
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This article originally published on Zacks Investment Research (zacks.com).