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Persimmon (PSMMY) AI Stock Analysis

39 Followers
PSMMY

Persimmon

(Other OTC:PSMMY)

Select Model
Rating:74Outperform
Price Target:$39.00â–²(14.83% Upside)
Action:upgraded
Date:11/08/26

The score is supported primarily by strong balance-sheet quality, positive operating momentum, and reasonable valuation with a substantial dividend yield. The main constraints are deteriorating cash generation, margin pressure, remediation obligations, and near-term sales and cost risks.

Positive Factors
Very low leverageExtremely low leverage gives Persimmon substantial financial flexibility through the housing cycle. It reduces balance-sheet strain, supports continued land investment and helps the company absorb weaker demand or cost pressure without relying heavily on additional borrowing.
Negative Factors
Weak cash conversionWeak and volatile cash conversion means reported earnings are not consistently translating into cash that can fund land investment, dividends or other priorities. Negative free cash flow also increases sensitivity to working-capital movements and makes financial performance less dependable.

Persimmon (PSMMY) vs. SPDR S&P 500 ETF (SPY)

-20%-10%0%10%20%30%PSMMY+10.43%SPY+14.55%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
Market Cap
$5.52B
Dividend Yield
4.80%
Average Volume (3M)
5,686
Price to Earnings (P/E)
13.5
Beta (1Y)
0.68
Revenue Growth
21.76%
EPS Growth
23.36%
Country
US
Employees
4,675
Sector
Consumer Cyclical
Sector Strength
61
Industry
Residential Construction

Persimmon Business Overview & Revenue Model

Company Description

Persimmon Plc operates as a prominent residential property developer throughout the United Kingdom, inclusive of its subsidiary companies. The firm offers a varied portfolio of housing, encompassing family residences marketed under the Persimmon Home...

How the Company Makes Money

Persimmon makes money primarily by building and selling new-build homes in the UK. Its core revenue stream is the sale of completed residential properties to private buyers, with revenue recognized when legal completion occurs and the home is transfe...

Persimmon Earnings Call Summary

Earnings Call Date:Aug 06, 2026(Q2-2026)|% Change Since:13.77%|Next Earnings Date:Mar 03, 2027
Earnings Call SentimentPositive

The call presents a decidedly positive operational story: clear volume-led growth (completions +13%), higher operating profit (+10%) and stronger order book and land/pipeline positions. These positives are tempered by meaningful near-term margin headwinds from embedded build-cost inflation, incentives, remediation liabilities (GBP 206m) and a short-term sales softening. Management retains a strong balance sheet, medium-term targets (20% operating margin and improved ROCE) and active mitigation plans (self-help cost savings, vertical integration, new house types), and reiterates guidance for c.12,500 homes in 2026. Overall the positives around growth, cash/land position and strategic progress outweigh the near-term cost and execution risks.

Positive Updates

Volume and Completions Growth
New home completions rose 13% to 5,189 in H1 (and are up 22% over three years), driven by higher outlets and improved sales rates; average outlets were 273 (versus 272 last year).

Negative Updates

Margin Pressure and Cost Inflation
Gross margin was lower (reported gross margin ~18%) and operating margin reduced from 13.1% to 12.8% due to product mix (more affordable/HA units), higher incentives and embedded build cost inflation; management expects continued margin pressure into H2 and 2027.

Company Guidance

Guidance reiterated that, assuming stable market conditions, Persimmon expects to deliver around 12,500 homes in FY26 (the top end of prior guidance) with underlying PBT broadly in line with consensus and year‑end net cash in line with previous guidance; adjusted gearing was 18% at 30 June (including land creditors) and could be around 20% at year‑end. Key H1 metrics underpinning that view include 5,189 completions (+13%), private completions 4,261 (+7%), average outlets 273, net private weekly sales 205 (+7%), a private sales rate (incl. bulk) of 0.75 (5‑week rate 0.72 incl. bulk, 0.59 excl.), a £1.9bn total forward order book (private book £1.3bn, up 5%, ~8% sold for the year; affordable order book £600m fully secured), underlying PBT £170m (+3%), underlying operating profit £189m (+10%) with a 12.8% operating margin, housing revenue ~£1.5bn, gross profit £267m (gross margin 18%), underlying EPS 38p (+3%), ROCE 11.3% (+10%), net debt £165m, PX stock £168m, £1bn committed bank facilities, owned/controlled land bank ~81,000 plots (strategic/promoter land ~93,000 plots), 6,123 detailed planning plots secured in H1 (118% of completions), and remediation items: closing provision £206m, H1 remediation spend £24m (total >£200m to date) with c.£100m planned this year; management also flags an embedded cost headwind of c.£40–50m over 18 months (half already identified to be mitigated) and reiterates medium‑term ambitions of a 20% operating margin and improved ROCE.

Persimmon Financial Statement Overview

Summary

Strong balance-sheet stability from negligible leverage and a substantial equity base supports the score. However, margin compression and sharply weaker operating and free cash flow indicate meaningful execution and cash-generation risks.

Income Statement

72Positive

Balance Sheet

92Very Positive

Cash Flow

45Neutral
Financial statement breakdown
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue3.97B3.75B3.20B2.77B3.82B3.61B
Gross Profit581.33M641.72M580.40M795.10M867.50M1.08B
EBITDA471.51M456.40M400.40M368.80M738.20M973.50M
Net Income305.24M279.44M267.10M255.40M561.00M787.20M
Balance Sheet
Total Assets5.48B5.31B4.83B4.79B5.03B4.79B
Cash, Cash Equivalents and Short-Term Investments109.34M116.79M258.60M420.10M861.60M1.25B
Total Debt275.00M16.77M14.50M188.40M498.00M436.90M
Total Liabilities1.86B1.70B1.33B1.37B1.59B1.17B
Stockholders Equity3.61B3.61B3.51B3.42B3.44B3.63B
Cash Flow
Free Cash Flow-164.05M-11.74M52.60M-166.20M371.80M763.90M
Operating Cash Flow-136.85M27.97M84.90M-129.80M402.30M784.80M
Investing Cash Flow37.19M26.21M-45.00M-42.90M-29.80M-18.20M
Financing Cash Flow82.38M-192.68M-201.40M-268.80M-757.50M-754.10M

Persimmon Technical Analysis

Technical Analysis SentimentPositive
Last Price33.96

Price Trends

50DMA32.47Positive
100DMA31.05Positive
200DMA30.85Positive

Market Momentum

MACD0.45Positive
RSI52.30Neutral
STOCH29.83Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSMMY, the sentiment is Positive. The current price of 33.96 is below the 20-day moving average (MA) of 34.06, above the 50-day MA of 32.47, and above the 200-day MA of 30.85, indicating a neutral trend. The MACD of 0.45 indicates Positive momentum. The RSI at 52.30 is Neutral, neither overbought nor oversold. The STOCH value of 29.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSMMY.

Persimmon Peers Comparison

Overall Rating

UnderperformOutperform
Sector (61)

Financial Indicators

PSMMY against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
PSMMYPSMMY74Outperform$5.49B13.528.45%4.80%21.76%23.36%
DHIDHI71Outperform$39.21B14.3412.22%1.27%-3.52%-12.68%
PHMPHM66Neutral$23.36B13.5113.80%0.82%-9.35%-27.96%
LENLEN65Neutral$19.83B15.806.03%2.39%-8.01%-47.77%
Sector *61Neutral$18.38B12.79-2.54%3.03%1.52%-15.83%
MTHMTH52Neutral$4.17B14.495.84%2.90%-14.89%-41.01%
KBHKBH50Neutral$2.94B13.205.93%2.09%-20.80%-50.30%

* Consumer Cyclical Sector Average

Performance Comparison

-20%0%20%PSMMYDHIKBHLENMTHPHMDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
PSMMY and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
PSMMYPersimmon Plc Unsponsored ADR33.963.069.89%
DHID.R. Horton Inc145.559.476.96%
KBHKB Home47.90-9.58-16.67%
LENLennar Corporation83.61-27.99-25.08%
MTHMeritage Homes Corp64.471.682.67%
PHMPultegroup127.0114.0912.48%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 08, 2026