PulteGroup (PHM) Surges 75% in a Year: More Upside in 2024?

Core Viewpoint - Despite rising mortgage rates, the housing market outlook remains positive due to favorable demographics, a significant housing supply shortage, and strong demand trends [1] Company Performance - PulteGroup, Inc. (PHM) has experienced a 74.9% stock price increase over the past year, outperforming the Zacks Building Products - Home Builders industry's growth of 51.1% [1] - The Zacks Consensus Estimate for PulteGroup's 2024 earnings per share (EPS) has risen from $11.77 to $12.89 over the past 30 days, indicating increased analyst optimism [1] Growth Drivers - Solid Operating Model: PulteGroup maintains a balanced approach between speculative and build-to-order sales, allowing flexibility to meet diverse buyer needs [3][4] - Land Acquisition Strategy: The company invested $4.3 billion in land acquisition in 2023 and plans to spend about $5 billion in 2024, focusing on developing existing land assets [4][5] - Focus on Affordability: PulteGroup targets entry-level homes, with first-time buyers constituting 41% of its customer base in Q1 2024, aligning with its strategy to cater to this segment [5] Financial Metrics - PulteGroup's trailing 12-month Return on Equity (ROE) stands at 25.8%, significantly higher than the industry average of 15.9%, reflecting efficient use of shareholder funds [6]