PulteGroup Inc (PHM) is undervalued and Toll Brothers Inc (TOL) is undervalued.
Against our estimates of intrinsic value, TOL trades at the wider discount: a margin of safety of +35%, against +32% for PHM.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 10.5% (average of 3 methods) values the shares at $179.30; the price of $122.29 is 32% below that value, and 72% of that value comes from beyond year five.
Leak Score 77/100 on 9 of 12 signals
Discounting its cash flows at 10.0% (average of 3 methods) values the shares at $211.05; the price of $137.57 is 35% below that value, and 73% of that value comes from beyond year five.
Leak Score 84/100 on 3 of 12 signals
| Metric | PHM | TOL |
|---|---|---|
| Verdict | Undervalued | Undervalued |
| Price | $122.29 | $137.57 |
| Intrinsic value | $179.30 | $211.05 |
| Margin of safety | +32% | +35% |
| Leak Score | 77/100 (9/12) | 84/100 (3/12) |
| Market cap | $22.9B | $12.7B |
| Revenue growth, 5 years | 9.4% | 9.2% |
| Operating margin | 15.6% | 14.4% |
| Net margin | 11.6% | 11.1% |
| Return on equity | 14.9% | 14.4% |
| Debt to equity | 0.19 | 0.34 |
| P/E | 12.5x | 11.1x |
| Forward P/E | 11.0x | 9.9x |
| P/B | 1.8x | 1.5x |
| Dividend yield | 0.8% | 0.8% |