How Will PulteGroup Stock React To Its Upcoming Q1 Earnings?

PulteGroup (NYSE: PHM), an American home construction company, is set to report its fiscal first-quarter earnings on Tuesday, April 22, 2025. Analysts predict the company will report earnings of $2.42 per share on $3.82 billion in sales. This would represent a 23% decline in earnings and a 3% fall in sales compared to the previous year’s figures of $3.13 per share and $3.95 billion, respectively. Historically, the stock has increased following earnings 65% of the time, with a median one-day rise of 4.3% and a maximum growth of 9%.

PulteGroup’s 11% drop in sales order backlog in the last (Q4) quarter may signal pressure on future revenue. Navigating this alongside market competition and economic headwinds will be key to sustaining growth in the coming quarters. The company has $19 Bil in current market capitalization. Revenue over the last twelve months was $18 Bil, and it was operationally profitable with $3.9 Bil in operating profits and net income of $3.1 Bil. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might turn the odds in your favor if you are an event-driven trader.

For event-driven traders, historical patterns may offer an edge, whether by positioning ahead of earnings or reacting to post-release moves. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception. See earnings reaction history of all stocks.

Image by Paul Brennan from Pixabay

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PulteGroup’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 13 positive and 7 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 65% of the time.
• Notably, this percentage increases to 75% if we consider data for the last 3 years instead of 5.
• Median of the 13 positive returns = 4.3%, and median of the 7 negative returns = -4.3%

The table below summarizes additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings, along with the statistics.

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

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