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KB Home (KBH) Registers a Bigger Fall Than the Market: Important Facts to Note

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In the latest trading session, KB Home (KBH - Free Report) closed at $58.80, marking a -1.31% move from the previous day. The stock's performance was behind the S&P 500's daily loss of 0.25%. Meanwhile, the Dow experienced a drop of 0.45%, and the technology-dominated Nasdaq saw a decrease of 0.3%.

The homebuilder's shares have seen an increase of 7.16% over the last month, surpassing the Construction sector's gain of 5.69% and the S&P 500's gain of 2.71%.

The investment community will be closely monitoring the performance of KB Home in its forthcoming earnings report. In that report, analysts expect KB Home to post earnings of $1.56 per share. This would mark a year-over-year decline of 23.53%. Alongside, our most recent consensus estimate is anticipating revenue of $1.61 billion, indicating a 8.05% downward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $6.55 per share and a revenue of $6.41 billion, indicating changes of -22.49% and -7.52%, respectively, from the former year.

It is also important to note the recent changes to analyst estimates for KB Home. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Right now, KB Home possesses a Zacks Rank of #5 (Strong Sell).

With respect to valuation, KB Home is currently being traded at a Forward P/E ratio of 9.1. This signifies a discount in comparison to the average Forward P/E of 11.36 for its industry.

Also, we should mention that KBH has a PEG ratio of 4.79. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Building Products - Home Builders industry had an average PEG ratio of 2.32.

The Building Products - Home Builders industry is part of the Construction sector. At present, this industry carries a Zacks Industry Rank of 224, placing it within the bottom 10% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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