Homebuilding company PulteGroup (NYSE:PHM) met Wall Street’s revenue expectations in Q1 CY2026, but sales fell by 12.4% year on year to $3.41 billion. Its GAAP profit of $1.79 per share was 1.1% below analysts’ consensus estimates.
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PulteGroup (PHM) Q1 CY2026 Highlights:
- Revenue: $3.41 billion vs analyst estimates of $3.39 billion (12.4% year-on-year decline, in line)
- EPS (GAAP): $1.79 vs analyst expectations of $1.81 (1.1% miss)
- Adjusted EBITDA: $493.3 million vs analyst estimates of $519.2 million (14.5% margin, 5% miss)
- Operating Margin: 13.2%, down from 17.3% in the same quarter last year
- Free Cash Flow Margin: 3.9%, up from 2.7% in the same quarter last year
- Backlog: $6.53 billion at quarter end, down 9.3% year on year
- Market Capitalization: $24.44 billion
“Our first quarter results reflect PulteGroup’s ability to successfully navigate current market conditions as we work to meet buyer demand, turn our assets and drive high returns,” said PulteGroup President and CEO Ryan Marshall.
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
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, PulteGroup’s sales grew at a decent 8.3% compounded annual growth rate over the last five years. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. PulteGroup’s recent performance shows its demand has slowed as its annualized revenue growth of 1.2% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, PulteGroup reported a rather uninspiring 12.4% year-on-year revenue decline to $3.41 billion of revenue, in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to decline by 2.3% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
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%. 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.
Analyzing the trend in its profitability, PulteGroup’s operating margin decreased by 2.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, PulteGroup generated an operating margin profit margin of 13.2%, down 4.1 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 13% compounded annual growth rate over the last five years, higher than its 8.3% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.
We can take a deeper look into PulteGroup’s earnings to better understand the drivers of its performance. A five-year view shows that PulteGroup has repurchased its stock, shrinking its share count by 27.3%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. 
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For PulteGroup, its two-year annual EPS declines of 9.2% mark a reversal from its (seemingly) healthy five-year trend. We hope PulteGroup can return to earnings growth in the future.
In Q1, PulteGroup reported EPS of $1.79, down from $2.57 in the same quarter last year. This print slightly missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects PulteGroup’s full-year EPS of $10.34 to shrink by 1.3%.
Key Takeaways from PulteGroup’s Q1 Results
We enjoyed seeing PulteGroup beat analysts’ adjusted operating income expectations this quarter. We were also happy its revenue was in line with Wall Street’s estimates. On the other hand, its EBITDA missed and its EPS fell a bit short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 6.8% to $118.93 immediately after reporting.
Is PulteGroup an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).