KB Home (KBH - Free Report) , a well-known home building company in the United States, recently announced the opening of its latest home community in Tucson — the Montaretto Estates.
Like most KB Homes, this estate will provide home buyers various amenities according to individual taste and preferences. In addition, the estate is located near major employment centers with adequate dining, shopping and entertainment facilities.
The gated community will have 95 single-story homes ranging in size from 1,231 to 2,413 square feet with ample space and facilities for consumers. The estate will also have energy and water saving systems, helping home buyers manage their utility bills.
Notably, one of KB Home’s key business strategies is to drive revenues through growth in community. In fact, over the last three years, the company has focused on four strategic initiatives to drive profits and revenues, ensuring success in fiscal 2017 and beyond. These initiatives include boosting community count, achieving higher revenue per community with a higher profitability per unit, and increasing asset efficiency through return on capital invested.
The company is taking various initiatives to drive its community count. In the second quarter of fiscal 2017, KB Home reported an average community count of 238, down 2% year over year. For fiscal 2017, the company expects community count to remain flat. Furthermore, higher cost of labor and supply constraints in the U.S. homebuilding space pose a challenge for KB Home.
Nonetheless, the company’s relentless efforts in attracting homebuyers to community homes and thereby acquiring higher revenue per community poises KB Home well for the analysts’ speculation. In the last three months, the Zacks Consensus Estimate for current and next-year earnings have gone up 5.6% and 5.1%, respectively.
Moreover, this Zacks Rank #3 (Hold) company’s shares have outperformed the industry year to date. The stock has rallied 35.3%, compared with the 29.2% gain of the industry.
Stocks to Consider
A few better-ranked stocks in the industry include Beazer Homes USA, Inc. (BZH - Free Report) , NVR, Inc. (NVR - Free Report) and Lennar Corporation (LEN - Free Report) . While Beazer Homes and NVR sports a Zacks Rank #1 (Strong Buy), Lennar carries a Zacks Rank #2. You can see see the complete list of today’s Zacks #1 Rank stocks here
Beazer Homes’ current year earnings estimates have nudged up by 7.6% over the last 60 days. Earnings also surpassed the Zacks Consensus Estimate in two of the trailing four quarters with an average beat of 103.47%.
Current year earnings estimates for NVR increased 7.3% over the last 60 days. Earnings surpassed the consensus estimate in three of the trailing four quarters with an average beat of 14.19%.
Lennar’s current year earnings are expected to increase 9.5%. Additionally, the company witnessed earnings surprise in each of the trailing four quarters with average surprise of 11.55%.
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