Valued at a market cap of $22.3 billion, PulteGroup, Inc. (PHM) is a leading homebuilding and financial services company in the United States. The Atlanta, Georgia-based company designs and constructs a wide variety of housing options, including single-family homes, townhomes, condominiums, and duplexes, under well-known brands like Centex, Pulte Homes, Del Webb, and DiVosta Homes. 

Companies valued at $10 billion or more are generally described as “large-cap” stocks, and PulteGroup fits right into that category. Its operations are organized into six homebuilding segments across key regions: Northeast, Southeast, Florida, Texas, Midwest, and West, catering to first-time, move-up, and active adult homebuyers. Additionally, PulteGroup provides mortgage financing and title services through Pulte Mortgage and other subsidiaries, ensuring a seamless homebuying experience.

However, the homebuilder pulled back 27.8% from its 52-week high of $149.47, recorded on Oct. 21. Shares of PulteGroup have declined nearly 24% over the past three months, lagging behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 14.4% increase over the same time frame.

In the long term, PHM stock is up 4.5% on a YTD basis, underperforming XLY’s 25.8% rise. Moreover, shares of PulteGroup have gained 5.7% over the past 52 weeks, compared to XLY’s 26.3% return over the same time frame.

PHM stock has been trading below its 50-day moving average since late-October. Also, the stock has fallen below its 200-day moving average since mid-December.

Despite reporting stronger-than-expected Q3 profit of $3.35 per share and revenue of $4.5 billion, shares of PHM dipped 7.2% on Oct. 22 due to concerns over a decline in the company's home sales gross margin, which dropped to 28.8%. Although home closings rose 12%, the average selling price of homes remained flat from the previous quarter and showed minimal growth compared to last year. Additionally, the company’s unit backlog dropped to 12,089 units with a value of $7.7 billion, a decrease from both the prior quarter and the year-ago period. These factors, combined with increased homebuilding SG&A expenses, outweighed the positive earnings and revenue performance.

Nevertheless, in comparison, rival Lennar Corporation (LEN) is underperforming PHM. Shares of Lennar have declined 6.8% over the past 52 weeks and 8.2% on a YTD basis.

Despite PHM’s weak price action, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 16 analysts covering the stock, and as of writing, PHM is trading below the mean price target of $146.82.