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Are Investors Undervaluing KB Home (KBH) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.67, which compares to its industry's average of 11.08. KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.93, all within the past year.
KBH is also sporting a PEG ratio of 0.80. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KBH's industry currently sports an average PEG of 0.83. Over the past 52 weeks, KBH's PEG has been as high as 1.35 and as low as 0.70, with a median of 1.05.
Investors should also recognize that KBH has a P/B ratio of 1.36. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.78. Over the past year, KBH's P/B has been as high as 1.37 and as low as 0.86, with a median of 1.09.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KBH has a P/S ratio of 0.83. This compares to its industry's average P/S of 1.02.
Finally, investors should note that KBH has a P/CF ratio of 8.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.10. Over the past 52 weeks, KBH's P/CF has been as high as 8.54 and as low as 3.91, with a median of 5.69.
These are only a few of the key metrics included in KB Home's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, KBH looks like an impressive value stock at the moment.
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Are Investors Undervaluing KB Home (KBH) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.67, which compares to its industry's average of 11.08. KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.93, all within the past year.
KBH is also sporting a PEG ratio of 0.80. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KBH's industry currently sports an average PEG of 0.83. Over the past 52 weeks, KBH's PEG has been as high as 1.35 and as low as 0.70, with a median of 1.05.
Investors should also recognize that KBH has a P/B ratio of 1.36. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.78. Over the past year, KBH's P/B has been as high as 1.37 and as low as 0.86, with a median of 1.09.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KBH has a P/S ratio of 0.83. This compares to its industry's average P/S of 1.02.
Finally, investors should note that KBH has a P/CF ratio of 8.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.10. Over the past 52 weeks, KBH's P/CF has been as high as 8.54 and as low as 3.91, with a median of 5.69.
These are only a few of the key metrics included in KB Home's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, KBH looks like an impressive value stock at the moment.