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KB Home (KBH) Stock Sinks As Market Gains: What You Should Know

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  • KBH
  • ^GSPC

KB Home (KBH) closed the most recent trading day at $43.54, moving -0.98% from the previous trading session. This move lagged the S&P 500's daily gain of 0.23%. Elsewhere, the Dow lost 0.03%, while the tech-heavy Nasdaq added 0.09%.

Coming into today, shares of the homebuilder had gained 8.97% in the past month. In that same time, the Construction sector gained 7.32%, while the S&P 500 gained 3.34%.

KB Home will be looking to display strength as it nears its next earnings release. In that report, analysts expect KB Home to post earnings of $1.77 per share. This would mark year-over-year growth of 58.04%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.72 billion, up 43.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.90 per share and revenue of $5.77 billion. These totals would mark changes of +88.5% and +37.83%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for KB Home. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. KB Home is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, KB Home is holding a Forward P/E ratio of 7.45. This valuation marks a premium compared to its industry's average Forward P/E of 7.19.

It is also worth noting that KBH currently has a PEG ratio of 0.2. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Home Builders industry currently had an average PEG ratio of 0.33 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 68, which puts it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KBH in the coming trading sessions, be sure to utilize Zacks.com.


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