We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, its adjusted earnings per share (EPS) and total revenues topped the Zacks Consensus Estimate by 7.4% and 1.5%, respectively. However, on a year-over-year basis, both metrics tumbled 21.1% and 7.4%, respectively.
KBH’s earnings topped the consensus mark in three of the last four quarters and missed on the remaining one occasion, with an average surprise of 2.3%.
Trend in KBH’s Estimate Revision
For the fiscal fourth quarter, the Zacks Consensus Estimate for adjusted EPS has remained unchanged at $1.79 over the past 60 days. The projected figure indicates a 29% decline from the year-ago quarter’s earnings of $2.52 per share.
The consensus estimate for total revenues is pegged at $1.65 billion, indicating a decline of 17.6% from the prior-year quarter’s level.
Factors to Shape KB Home’s Q4 Results
Revenues
In the fiscal fourth quarter, KB Home’s top line is expected to have declined year over year. The decline is likely to have been caused by lower home deliveries and a softer average selling price of deliveries. Demand conditions are expected to have remained uneven, as affordability pressures continued to limit buyer activity across several markets.
High mortgage rates are likely to have remained a key headwind. Per Freddie Mac, the 30-year fixed mortgage rate ranged between 6.5% and 6.23% from September to November 2025. Although rates moved lower during this period, homebuyers are still likely to have struggled to adjust to the new level. Lingering inflation and uncertainty linked to the new tariff regime are also expected to have added pressure, weighing on confidence and slowing the pace of new home purchases.
Due to the ongoing market pressures, the company expects housing revenues in the fiscal fourth quarter to be $1.6-$1.7 billion, down from $2 billion reported a year ago. ASP of home deliveries during the quarter is projected between $465,000 and $475,000, also down year over year from $501,000.
Our Zacks model predicts housing revenues to be down year over year by 17.6% to $1.64 billion. We expect home deliveries to be down 10.7% year over year to 3,552 homes.
Although homebuyers are still likely to have struggled to adjust to the new mortgage rate benchmark amid inflationary pressures, KB Home is expected to have benefited from continued execution initiatives aimed at improving affordability and revenue visibility. For the fiscal fourth quarter, the company is likely to have focused on optimizing assets through a disciplined sales cadence, emphasizing built-to-order homes while continuing to sell inventory, a strategy expected to support backlog visibility and margin stability over time.
Margins
Although initiatives like the Returns-Focused Growth Plan and Built-to-Order approach are encouraging, higher relative land costs alongside price reductions and other homebuyer concessions are likely to have weighed heavily on KBH’s margins in the fiscal fourth quarter.
The company expects adjusted housing gross margin in the range of 18-18.4%, significantly down from 20.9% reported in the year-ago quarter. The homebuilding adjusted operating margin (assuming no inventory-related charges) is expected to be approximately 8.9%, comparing unfavorably with the year-ago figure of 11.5%.
We expect adjusted housing gross margin and homebuilding adjusted operating margin to be 17.8% and 8.7%, respectively, reflecting year-over-year declines of 310 basis points (bps) and 280 bps.
KBH expects selling, general & administrative expenses, as a percentage of housing revenues, to be between 9.3% and 9.7%. The metric was 9.4% in the prior-year quarter. Our model expects the metric to be up year over year by 20 bps to 9.6% in the fiscal fourth quarter.
Orders & Backlogs
KB Home’s continuous efforts to match its housing starts with sales pace are noteworthy.
Keeping the tailwinds in mind, we expect new orders to increase 1.4% to 2,727 units on a year-over-year basis. However, the backlog is expected to be 3,508 units, implying a fall from 4,434 units reported in the prior year.
What Our Model Indicates for KBH
Our proven model does not conclusively predict an earnings beat for KB Home this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
KBH’s Earnings ESP: KB Home has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
KBH’s Zacks Rank: KB Home currently has a Zacks Rank of 4 (Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector, which, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
Installed Building Products’ earnings beat estimates in two of the last four quarters and missed on the remaining two occasions, the average surprise being 8.4%. For the fourth quarter of 2025, Installed Building Products’ earnings are expected to inch down 2.4%.
Orion Energy Systems, Inc. (OESX - Free Report) currently has an Earnings ESP of +48.57% and a Zacks Rank of 2.
With an average surprise of 28.3%, Orion Energy Systems’ earnings have topped in three of the trailing four quarters and met on the remaining one occasion. Orion Energy Systems’ earnings for the third quarter of fiscal 2026 are expected to grow 64%.
Quanta Services (PWR - Free Report) has an Earnings ESP of +0.50% and a Zacks Rank of 3.
With an average surprise of 5.8%, PWR’s earnings topped estimates in each of the last four quarters. PWR’s earnings for the fourth quarter of 2025 are expected to rise 2%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
KB Home to Report Q4 Earnings: What's in Store for the Stock?
Key Takeaways
KB Home (KBH - Free Report) is slated to report its fourth-quarter fiscal 2025 (ended Nov. 30) results on Dec. 18, after market close.
In the last reported quarter, its adjusted earnings per share (EPS) and total revenues topped the Zacks Consensus Estimate by 7.4% and 1.5%, respectively. However, on a year-over-year basis, both metrics tumbled 21.1% and 7.4%, respectively.
KBH’s earnings topped the consensus mark in three of the last four quarters and missed on the remaining one occasion, with an average surprise of 2.3%.
Trend in KBH’s Estimate Revision
For the fiscal fourth quarter, the Zacks Consensus Estimate for adjusted EPS has remained unchanged at $1.79 over the past 60 days. The projected figure indicates a 29% decline from the year-ago quarter’s earnings of $2.52 per share.
KB Home Price and EPS Surprise
KB Home price-eps-surprise | KB Home Quote
The consensus estimate for total revenues is pegged at $1.65 billion, indicating a decline of 17.6% from the prior-year quarter’s level.
Factors to Shape KB Home’s Q4 Results
Revenues
In the fiscal fourth quarter, KB Home’s top line is expected to have declined year over year. The decline is likely to have been caused by lower home deliveries and a softer average selling price of deliveries. Demand conditions are expected to have remained uneven, as affordability pressures continued to limit buyer activity across several markets.
High mortgage rates are likely to have remained a key headwind. Per Freddie Mac, the 30-year fixed mortgage rate ranged between 6.5% and 6.23% from September to November 2025. Although rates moved lower during this period, homebuyers are still likely to have struggled to adjust to the new level. Lingering inflation and uncertainty linked to the new tariff regime are also expected to have added pressure, weighing on confidence and slowing the pace of new home purchases.
Due to the ongoing market pressures, the company expects housing revenues in the fiscal fourth quarter to be $1.6-$1.7 billion, down from $2 billion reported a year ago. ASP of home deliveries during the quarter is projected between $465,000 and $475,000, also down year over year from $501,000.
Our Zacks model predicts housing revenues to be down year over year by 17.6% to $1.64 billion. We expect home deliveries to be down 10.7% year over year to 3,552 homes.
Although homebuyers are still likely to have struggled to adjust to the new mortgage rate benchmark amid inflationary pressures, KB Home is expected to have benefited from continued execution initiatives aimed at improving affordability and revenue visibility. For the fiscal fourth quarter, the company is likely to have focused on optimizing assets through a disciplined sales cadence, emphasizing built-to-order homes while continuing to sell inventory, a strategy expected to support backlog visibility and margin stability over time.
Margins
Although initiatives like the Returns-Focused Growth Plan and Built-to-Order approach are encouraging, higher relative land costs alongside price reductions and other homebuyer concessions are likely to have weighed heavily on KBH’s margins in the fiscal fourth quarter.
The company expects adjusted housing gross margin in the range of 18-18.4%, significantly down from 20.9% reported in the year-ago quarter. The homebuilding adjusted operating margin (assuming no inventory-related charges) is expected to be approximately 8.9%, comparing unfavorably with the year-ago figure of 11.5%.
We expect adjusted housing gross margin and homebuilding adjusted operating margin to be 17.8% and 8.7%, respectively, reflecting year-over-year declines of 310 basis points (bps) and 280 bps.
KBH expects selling, general & administrative expenses, as a percentage of housing revenues, to be between 9.3% and 9.7%. The metric was 9.4% in the prior-year quarter. Our model expects the metric to be up year over year by 20 bps to 9.6% in the fiscal fourth quarter.
Orders & Backlogs
KB Home’s continuous efforts to match its housing starts with sales pace are noteworthy.
Keeping the tailwinds in mind, we expect new orders to increase 1.4% to 2,727 units on a year-over-year basis. However, the backlog is expected to be 3,508 units, implying a fall from 4,434 units reported in the prior year.
What Our Model Indicates for KBH
Our proven model does not conclusively predict an earnings beat for KB Home this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
KBH’s Earnings ESP: KB Home has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
KBH’s Zacks Rank: KB Home currently has a Zacks Rank of 4 (Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector, which, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
Installed Building Products, Inc. (IBP - Free Report) currently has an Earnings ESP of +6.20% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Installed Building Products’ earnings beat estimates in two of the last four quarters and missed on the remaining two occasions, the average surprise being 8.4%. For the fourth quarter of 2025, Installed Building Products’ earnings are expected to inch down 2.4%.
Orion Energy Systems, Inc. (OESX - Free Report) currently has an Earnings ESP of +48.57% and a Zacks Rank of 2.
With an average surprise of 28.3%, Orion Energy Systems’ earnings have topped in three of the trailing four quarters and met on the remaining one occasion. Orion Energy Systems’ earnings for the third quarter of fiscal 2026 are expected to grow 64%.
Quanta Services (PWR - Free Report) has an Earnings ESP of +0.50% and a Zacks Rank of 3.
With an average surprise of 5.8%, PWR’s earnings topped estimates in each of the last four quarters. PWR’s earnings for the fourth quarter of 2025 are expected to rise 2%.