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KB Home (KBH) Opens New Family Home Community, Stewart Crossing

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KB Home (KBH - Free Report) recently announced the opening of a new single family house community — Stewart Crossing — in the prime location of Pierce County, WA.

Being located at a 10-mile distance from Tacoma, Stewart Crossing is easily commutable to interstate 5 and highway 167s. Also, the community is in close proximity to all the shopping, dining and entertainment hubs in Puyallup and South Hill. Places like Washington State Fair, Tacoma Museum District and Tacoma Dome are also nearby. The community at Stewart Crossing starts at the price tag of $540,000.

This new single-family home community will offer highly sophisticated master rooms with capacious kitchens, extensive sleeping rooms with walk-in closets and huge storage area. Each floor plan will comprise up to five bedrooms and three baths, with a floor area of nearly 1500-2700 square feet.

With respect to this, Ryan Kemp, president of KB Home’s Seattle division, stated, “The new community is also close to popular shopping, dining and entertainment in downtown Puyallup and South Hill, and a short drive to popular outdoor recreation. As with other KB Home communities, Stewart Crossing provides home shoppers the opportunity to purchase a personalized, new KB home at a price that fits their budget.”

KB Home is one of the largest and most recognized homebuilders in the United States over the past 60 years. With the addition of these new communities, the company now operates in 45 markets across eight states and serves a wide range of buyer groups. KB Home is the first builder to make every home ENERGY STAR certified.

Built-to-Order Approach: Major Growth Driver

KB Home’s Built-to-Order process provides buyers a wide range of choices in the major aspects of their future home along with a personalized customer experience through in-house community teams. The company gives homebuyers exceptional choice and control offering a wide variety of homes at an affordable price. This highly consumer-centric approach helps homebuyers design a home with the features and amenities of their choice. Not only has this approach given KB Home a competitive advantage over its peers, it has led to low-cost production.

The company’s built-to-order homes (which represented more than 70% of fiscal first-quarter net orders) provide higher revenues from premiums (lots, plans, and elevations) as well as design studio and structural options. Owing to this model, net order growth for first-quarter fiscal 2020 led to a 35% year-over-year increase in net order value, which in turn fueled the expansion of backlog value to $3.69 billion, reflecting a 58.7% year-over-year rise on roughly 9,238 units. Owing to this higher backlog, the company is confident of generating increased revenues for fiscal 2021.

So far this year, shares of the company have surged 31.5% compared with the Zacks Building Products - Home Builders industry’s 14.6% growth.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

Currently, KB Home carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some top-ranked stocks in the Zacks Building Products - Home Builders industry include PulteGroup, Inc. (PHM - Free Report) , Meritage Homes Corporation (MTH - Free Report) and Toll Brothers, Inc. (TOL - Free Report) , each carrying a Zacks Rank #1.

PulteGroup and Meritage Homes’ earnings for the current year are expected to rise 48.3% and 32.9%, respectively.

Toll Brothers has a trailing four-quarter earnings surprise of 34.5%, on average.

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