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KB Home (KBH) Exceeds Market Returns: Some Facts to Consider

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KB Home (KBH - Free Report) closed the most recent trading day at $69.32, moving +1.72% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.26%. Elsewhere, the Dow saw an upswing of 0.18%, while the tech-heavy Nasdaq appreciated by 0.35%.

Shares of the homebuilder have depreciated by 2.84% over the course of the past month, outperforming the Construction sector's loss of 4% and lagging the S&P 500's gain of 3.25%.

The investment community will be paying close attention to the earnings performance of KB Home in its upcoming release. The company is slated to reveal its earnings on June 18, 2024. In that report, analysts expect KB Home to post earnings of $1.79 per share. This would mark a year-over-year decline of 7.73%. Simultaneously, our latest consensus estimate expects the revenue to be $1.64 billion, showing a 7.1% drop compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $8.01 per share and a revenue of $6.77 billion, demonstrating changes of +13.94% and +5.55%, respectively, from the preceding year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for KB Home. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. KB Home is holding a Zacks Rank of #2 (Buy) right now.

From a valuation perspective, KB Home is currently exchanging hands at a Forward P/E ratio of 8.51. For comparison, its industry has an average Forward P/E of 8.35, which means KB Home is trading at a premium to the group.

We can also see that KBH currently has a PEG ratio of 0.77. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Building Products - Home Builders industry held an average PEG ratio of 0.82.

The Building Products - Home Builders industry is part of the Construction sector. At present, this industry carries a Zacks Industry Rank of 27, placing it within the top 11% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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