For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in KB Home (
KBH Quick Quote KBH - Free Report) ten years ago? It may not have been easy to hold on to KBH for all that time, but if you did, how much would your investment be worth today? KB Home's Business In-Depth
With that in mind, let's take a look at KB Home's main business drivers.
Based in Los Angeles, CA, KB Home is a well-known homebuilder in the United States and one of the largest in the state. The company’s revenues are generated from its Homebuilding (accounting for 99.7% of first-quarter fiscal 2021 total revenues) and Financial Services (0.3%) operations.
The company’s Homebuilding operations include building and designing homes that cater to first time, move-up and active adult homebuyers on acquired or developed lands. KB Home also builds attached and detached single-family homes, town homes and condominiums.
There are four main reportable segments within the homebuilding reporting segment based on geographical presence: West Coast (comprising Washington and California), Southwest (comprising Arizona and Nevada), Central (constituting Colorado, and Texas) and Southeast (including Florida, North Carolina).
KB Home’s Financial Services operations offer mortgage banking, title and insurance services to homebuyers. This segment earns revenues mainly from insurance commissions and provision of title services.
KB Home had total liquidity of $1.36 billion as of Feb 28, 2021, including $787.6 million of available capacity under the unsecured revolving credit facility, and $569.8 million of cash and cash equivalents. Its net debt to capital was 30% as of Feb 28, 2021, which improved 510 basis points (bps) from Nov 30, 20120. KB Home’s backlog totaled 9,238 homes (as of Feb 28, 2021), up 58.7% from a year ago. Potential housing revenues from backlog increased 74% from the prior-year period to $3.69 billion. Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in KB Home a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in May 2011 would be worth $4,278.62, or a 327.86% gain, as of May 10, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 215.82% and the price of gold went up 16.02% over the same time frame.
Looking ahead, analysts are expecting more upside for KBH.
KB Home reported first-quarter fiscal 2021 results, wherein earnings beat the Zacks Consensus Estimate by 17.2%. Also, the top line and the bottom line grew 6.1% and 61.9%, respectively, year over year. Although the top line missed the consensus mark, KB Home’s net orders grew 23% in the fiscal first quarter. Its quarter-end backlog totaled 9,238 homes, up 58.7% from a year ago. The company is expected to benefit from backlog that grew 74% from the prior-year period to $3.69 billion. Robust backlog level, a strong lineup of community openings and solid return-focused growth model will help KB Home generate roughly $5.7 billion to $6.1 billion in housing revenues and operating margin in the range of 11% to 11.8% for fiscal 2021. Notably, shares of KB Home have outperformed the industry over the past six months.
The stock has jumped 7.17% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2021; the consensus estimate has moved up as well.