Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Shares of KB Home (KBH - Analyst Report) reached a 52-week high of $20.31 on Mar 8, 2013 ahead of first-quarter fiscal 2013 results later this month. The closing price of the homebuilder on Mar 8 was $20.18, representing a huge 1-year return of about 72.1% and year-to-date return of about 24.0%. Average volume of shares traded over the last three months stands at approximately 4800K.

Housing Boom Driving the Stock Higher

After witnessing severe and widespread downturn that began in mid-2006, the housing market is now recovering steadily. With the housing fundamental improving, KB Home is witnessing significant growth in both volumes and selling prices. The company saw increased homebuilding revenues and home deliveries in fiscal 2012.

Moreover, the company is seeing increased demand for larger homes with more design options, which is driving average selling prices higher. Further, KB Home has started rolling out communities in highly favorable submarkets, primarily in the Central and West Coast regions, which allows it to sell larger, higher priced homes, driving the average selling price higher. KB Home is also targeting the higher income, first-time and move-up buyers; all of whom are more inclined toward buying a new home rather than buying foreclosures. Further, it is improving and refining its products, activating communities (which were held for future development) in stabilizing markets, increasing revenues per community with intense focus on sales performance, and strengthening management teams with additional resources to improve its operating performance while carefully managing costs. Management believes that these growth initiatives will help it achieve profitability and also drive significant growth in 2013.

KB Home expects to increase its community count in 2013 as the current aggressive land acquisition and development activities are converted into open communities. KB Home expects to see meaningful revenue growth in the year with increased community count, rising ASPs, higher revenue per community, higher backlog and improving housing momentum.

Interestingly, in late January, KB Home announced impressive preliminary quarter-to-date (QTD) net order growth for new homes for the upcoming first quarter 2013. The number of new homes ordered was 750 as of Jan 18, 2013, up 54% from 488 in the year-ago period.

Other Stocks to Consider

KB Home carries a Zacks Rank #3 (Hold). Some other housing stocks worth considering include NVR Inc. (NVR - Snapshot Report) – Zacks Rank #1 (Strong Buy), D.R. Horton Inc. (DHI - Analyst Report) -Zacks Rank #2 (Buy), and Consorcio ARA, S. A. B. de C. V. - Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
VERTEX ENERG VTNR 8.25 +10.59%
MODINE MANUF MOD 17.12 +8.77%
CLAYTON WILL CWEI 140.03 +7.27%
E*TRADE FINA ETFC 22.67 +5.44%
KNIGHTSBRIDG VLCCF 13.22 +5.42%