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KB Home

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KB Home shares outperformed the Zacks categorized Building-Residential/Commercial industry, year to date. It has developed the right strategy to boost scale in existing geographic footprint, improve profitability per unit, generate higher operating margin and drive earnings while simultaneously generating positive cash flow to invest in growth and debt reduction. The company started 2017 with an impressive 20.7% growth in revenues and double-digit rise in deliveries and housing revenues. Strong orders in value (up 32%) and backlog (up 25%) bode well. However, the rising interest rates may dent demand, thereby hurting profits for KB Home. With the Fed announcing a hike in the benchmark, mortgage rates will probably rise later in 2017. High mortgage rates dilute the demand for new homes as mortgage loans become expensive.

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