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PulteGroup Teams Up With Builder Boost to Attract Customers

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Pulte Homes, a national brand of PulteGroup, Inc. (PHM - Free Report) , partners with Builder Boost, an Austin-based online resource and community provider, to unveil its Pulte Smart Home in Austin. Builder Boost sells newly-built homes via social media.

Pulte Home will connect every newly-build home with seamless Wi-Fi reliability, along with widened built-in access points and direct wiring throughout the area. The home owners will be able to control their lights, thermostat, security systems, appliances, etcetera using their cell phones or the sound of their voice.

The partnership is in line with PulteGroup’s aim of showcasing its property to a greater number of customers. The company has been undertaking various strategic initiatives to build a solid top-line momentum.

Backed by such strategies, shares of PulteGroup have gained 1.8% in the past year compared with its industry’s growth of 0.2%.

Strategic Initiatives to Drive Top-Line Growth

The move underscores PulteGroup’s extensive focus on value-creation initiatives. The partnership with Builder Boost will help the company connect with additional local home-buyers, in turn lifting up demand and sales.

Besides leveraging the power of social media advertising, PulteGroup has other profit-oriented initiatives that include land acquisition strategies, investing in high-return projects, cost-saving initiatives and capital allocation techniques.

Notably, over the past four-and-a-half years, the company invested more than $5 billion in acquiring new land assets. PulteGroup is also undertaking actions to improve the operational and financial performance. These initiatives include improving overhead leverage, increasing inventory turns and implementing new pricing strategies, which are expected to boost profits going ahead.

Our Take

We believe that the partnership will further boost sales at PulteGroup’s homebuilding segment. In the last reported quarter, the segment’s revenues increased 27.9% year over year.  Home sale revenues rose 25% on increased deliveries and average selling price (“ASP”). Also, backlogs were up 11% on a year-over-year basis, backed by a 5% increase in ASP of backlogs.

Zacks Rank & Stocks to Consider

Currently, PulteGroup sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the Zacks Homebuilding industry include D.R. Horton, Inc. (DHI - Free Report) , Beazer Homes USA, Inc. (BZH - Free Report) and Century Communities, Inc. (CCS - Free Report) . While D.R. Horton sports a Zacks Rank #1, Beazer Homes and Century Communities both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

D.R. Horton’s earnings surpassed the consensus estimate in each of the trailing four quarters, with an average positive surprise of 8.9%.

Beazer Homes delivered an average positive earnings surprise of 169.7% in the trailing four quarters.

Century Communities surpassed earnings estimates in each of the trailing four quarters, resulting in an average positive surprise of 55.3%.

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