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Zacks Investment Ideas feature highlights: KB Home
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For Immediate Release
Chicago, IL – April 30, 2026 – Today, Zacks Investment Ideas feature highlights KB Home (KBH - Free Report) .
Will Apple Report Blowout Q2 Results as It Navigates a CEO Succession Plan?
Zacks Rank #5 (Strong Sell) company KB Home is among the most well-known homebuilders in the United States and one of the largest in California. The Los Angeles-based company generates the lion's share of its revenues from homebuilding. KB Home focuses on building and designing homes that cater to first-time or first move-up purchasers (who represent 72% of sales).
Unlike many large home-builders that rely on "spec" homes (building a house first and finding a buyer later), KB Home uses a built-to-order (BTO) model. Additionally, KB home separates itself from competitors by being one of the leaders in energy-efficient construction, which reduces utility bills for clients. KBH focuses on the Millennial and Gen Z markets and mostly sells homes within the Sun Belt (California, Florida, Arizona, & Texas).
High Interest Rates a Headwind
KB Home continues to operate in a challenging demand environment, shaped by affordability constraints, elevated interest rates, and macroeconomic uncertainty. With the geopolitical uncertainty in the Middle East and the Strait of Hormuz, oil prices are likely to remain elevated. As a result, regardless of who is the Fed Chair, the Federal Reserve is unlikely to cut interest rates any time soon. In fact, betting market PolyMarket expects a 74% that there will be no rate cuts before July.
KBH Earnings are Slowing
During the first quarter of fiscal 2026, KB Home reported home deliveries of $452,100, down 9.7% year over year, driven by pricing adjustments to align with buyer budgets. Forward visibility remains pressured, with backlog down 18.8% year over year to 3,604 homes and backlog value declining 23% to $1.70 billion.
This reflects both earlier demand softness and the impact of faster build cycles, converting backlog into deliveries more quickly. As a result of the challenging housing environment, Zacks Consensus Estimates expect KBH to deliver -50% year-over-year earnings-per-share growth over the next 3 quarters.
KBH Margins\ Squeezed
KBH's gross margins are at 5-year lows amid increasing construction costs, wage inflation, and land costs.
Relative Weakness & Technical Damage
Over the past year, KBH shares have sunk 3% while the S&P 500 Index has jumped 32%. The poor price performance is a sign of relative weakness. Additionally, shares are stuck below the key moving averages, signaling a downtrend.
Bottom Line
KB Home is suffering from high interest rates, lower margins, and slowing earnings.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: KB Home
For Immediate Release
Chicago, IL – April 30, 2026 – Today, Zacks Investment Ideas feature highlights KB Home (KBH - Free Report) .
Will Apple Report Blowout Q2 Results as It Navigates a CEO Succession Plan?
Zacks Rank #5 (Strong Sell) company KB Home is among the most well-known homebuilders in the United States and one of the largest in California. The Los Angeles-based company generates the lion's share of its revenues from homebuilding. KB Home focuses on building and designing homes that cater to first-time or first move-up purchasers (who represent 72% of sales).
Unlike many large home-builders that rely on "spec" homes (building a house first and finding a buyer later), KB Home uses a built-to-order (BTO) model. Additionally, KB home separates itself from competitors by being one of the leaders in energy-efficient construction, which reduces utility bills for clients. KBH focuses on the Millennial and Gen Z markets and mostly sells homes within the Sun Belt (California, Florida, Arizona, & Texas).
High Interest Rates a Headwind
KB Home continues to operate in a challenging demand environment, shaped by affordability constraints, elevated interest rates, and macroeconomic uncertainty. With the geopolitical uncertainty in the Middle East and the Strait of Hormuz, oil prices are likely to remain elevated. As a result, regardless of who is the Fed Chair, the Federal Reserve is unlikely to cut interest rates any time soon. In fact, betting market PolyMarket expects a 74% that there will be no rate cuts before July.
KBH Earnings are Slowing
During the first quarter of fiscal 2026, KB Home reported home deliveries of $452,100, down 9.7% year over year, driven by pricing adjustments to align with buyer budgets. Forward visibility remains pressured, with backlog down 18.8% year over year to 3,604 homes and backlog value declining 23% to $1.70 billion.
This reflects both earlier demand softness and the impact of faster build cycles, converting backlog into deliveries more quickly. As a result of the challenging housing environment, Zacks Consensus Estimates expect KBH to deliver -50% year-over-year earnings-per-share growth over the next 3 quarters.
KBH Margins\ Squeezed
KBH's gross margins are at 5-year lows amid increasing construction costs, wage inflation, and land costs.
Relative Weakness & Technical Damage
Over the past year, KBH shares have sunk 3% while the S&P 500 Index has jumped 32%. The poor price performance is a sign of relative weakness. Additionally, shares are stuck below the key moving averages, signaling a downtrend.
Bottom Line
KB Home is suffering from high interest rates, lower margins, and slowing earnings.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.