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KB Home Unveils Hidden Canyons, Boosts Community Count

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KB Home (KBH - Free Report) opened its first home community in Texas Research Park (TRP) at Far West San Antonio.

This new community, named Hidden Canyons, offers quick access to Lackland AFB, downtown San Antonio, and major employers along Loop 1604. Owners will be able to enjoy amenities like a swimming pool with a pavilion and children’s playground.

All houses at Hidden Canyons will be designed in an energy and water efficient manner since KB Home uses ENERGY STAR certification and WaterSense-labeled faucets and water fixtures. These features help owners reduce their monthly utility bills.

It is to be noted that KB Home has been facing declining community count of late. At the end of third-quarter 2016, the company’s average community count was 235, down 9% year over year. Also, KB Home anticipates fourth-quarter average community count decline of about 8% on a year-over-year basis.

That said, KB Home has been focusing on several strategic initiatives over the last few years to drive profits and revenues. One of the company’s primary targets has been to boost community count which is expected to increase in the first quarter of fiscal 2017. The company boasts an impressive 3-5 year EPS growth rate of 27.92%.

The company is slated to report fourth-quarter fiscal 2016 results on Jan 11, after market close. The Zacks Consensus Estimate for KB Home’s earnings and revenues are pegged at 37 cents per share and $1.16 billion, respectively. Last quarter, the company surpassed earnings expectations by 7.69%.

Investors should note that shares of KB Home gained around 54.8% in the last one-year period compared to the Building-Residential/Commercial industry’s growth of 7.4%. Moreover, the company has a decent earnings history, beating estimates in three of the past four quarters at an average of 6.38%.



Earnings, however, for this Zacks Rank #4 (Sell) stock is expected to decline 13.5% in the soon-to-be-reported quarter.

Stocks to Consider

Better-ranked stocks in the sector include Century Communities, Inc. (CCS - Free Report) , Lennar Corp. (LEN - Free Report) and Beazer Homes USA, Inc. (BZH - Free Report) .

Century Communities sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Full-year 2016 earnings for Century Communities are expected to increase 22.6%.

Lennar and Beazer Homes hold a Zacks Rank #2 (Buy). Lennar is expected to witness 5.5% growth in fiscal 2017 earnings while Beazer Homes’ fiscal 2017 earnings are likely to drop 6.6%.

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