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KB Home (KBH) Boosts Community Count With Carriage Hill

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KB Home KBH recently announced the opening of Carriage Hill, the builder’s latest community of single-family homes in Apopka.

The community is easily accessible from U.S. Route 441, State Road 429 and 414, as well as Semoran Boulevard, as it is located near major employment centers with adequate dining, shopping and entertainment facilities, including Altamonte Mall and Winter Garden Village.

KB Home’s top priority has been to boost community count growth for driving revenues. Notably, the company’s net orders per community increased 15% in the second quarter to 5.5 per month, marking the highest springs on absorption pace. This compares favorably with 4.8 per month recorded in the year-ago quarter.

The company experienced strong absorption rate in the first half of 2018, resulting from faster rate of selling out of communities than KB Home had expected earlier.

Although average community count declined 10% in the second quarter of 2018, the company has plans to boost the same in the second half. Also, KB Home anticipates healthy community count growth in each quarter of 2019, with considerably higher planned openings in the first half of 2019 year over year. This expectation is backed by growth in lot count registered in the second quarter, with owned and controlled lots up by approximately 4500 year over year.

Meanwhile, shares of KBH, a Zacks Rank #3 (Hold) company, have outperformed its industry in a past month. Its shares have gained 3.7% against the industry’s decline of 2.2% in the said period. Its price performance is backed by an impressive earnings surprise history, having surpassed the consensus mark for 10 straight quarters. Impressive earnings performance, along with healthy housing industry and favorable demand trends in the KB Home-served markets will drive the stock’s performance in the near future.

Stocks to Consider

Some better-ranked stocks in the Zacks Homebuilding industry include D.R. Horton, Inc. DHI, PulteGroup, Inc. PHM and Century Communities, Inc. CCS. While D.R. Horton and PulteGroup sport a Zacks Rank #1 (Strong Buy), Century Communities carries 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 8.6%.

PulteGroup delivered an average positive earnings surprise of 14.3% 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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