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Are Investors Undervaluing KB Home (KBH) Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
KB Home (KBH - Free Report) is a stock many investors are watching right now. KBH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.51 right now. For comparison, its industry sports an average P/E of 10.09. Over the past 52 weeks, KBH's Forward P/E has been as high as 9.71 and as low as 2.44, with a median of 5.05.
Investors should also recognize that KBH has a P/B ratio of 1.15. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.40. KBH's P/B has been as high as 1.16 and as low as 0.63, with a median of 0.81, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KBH has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.74.
Finally, investors should note that KBH has a P/CF ratio of 5.25. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.41. Over the past 52 weeks, KBH's P/CF has been as high as 5.30 and as low as 2.80, with a median of 3.70.
Toll Brothers (TOL - Free Report) may be another strong Building Products - Home Builders stock to add to your shortlist. TOL is a # 1 (Strong Buy) stock with a Value grade of A.
Toll Brothers is trading at a forward earnings multiple of 7.22 at the moment, with a PEG ratio of 0.66. This compares to its industry's average P/E of 10.09 and average PEG ratio of 0.80.
Over the last 12 months, TOL's P/E has been as high as 8.19, as low as 3.84, with a median of 6.50, and its PEG ratio has been as high as 0.90, as low as 0.34, with a median of 0.69.
Furthermore, Toll Brothers holds a P/B ratio of 1.30 and its industry's price-to-book ratio is 1.40. TOL's P/B has been as high as 1.31, as low as 0.78, with a median of 1.02 over the past 12 months.
These are just a handful of the figures considered in KB Home and Toll Brothers's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KBH and TOL is an impressive value stock right now.
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Are Investors Undervaluing KB Home (KBH) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
KB Home (KBH - Free Report) is a stock many investors are watching right now. KBH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.51 right now. For comparison, its industry sports an average P/E of 10.09. Over the past 52 weeks, KBH's Forward P/E has been as high as 9.71 and as low as 2.44, with a median of 5.05.
Investors should also recognize that KBH has a P/B ratio of 1.15. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.40. KBH's P/B has been as high as 1.16 and as low as 0.63, with a median of 0.81, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KBH has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.74.
Finally, investors should note that KBH has a P/CF ratio of 5.25. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.41. Over the past 52 weeks, KBH's P/CF has been as high as 5.30 and as low as 2.80, with a median of 3.70.
Toll Brothers (TOL - Free Report) may be another strong Building Products - Home Builders stock to add to your shortlist. TOL is a # 1 (Strong Buy) stock with a Value grade of A.
Toll Brothers is trading at a forward earnings multiple of 7.22 at the moment, with a PEG ratio of 0.66. This compares to its industry's average P/E of 10.09 and average PEG ratio of 0.80.
Over the last 12 months, TOL's P/E has been as high as 8.19, as low as 3.84, with a median of 6.50, and its PEG ratio has been as high as 0.90, as low as 0.34, with a median of 0.69.
Furthermore, Toll Brothers holds a P/B ratio of 1.30 and its industry's price-to-book ratio is 1.40. TOL's P/B has been as high as 1.31, as low as 0.78, with a median of 1.02 over the past 12 months.
These are just a handful of the figures considered in KB Home and Toll Brothers's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KBH and TOL is an impressive value stock right now.