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KB Home (KBH) Down 8.8% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for KB Home (KBH - Free Report) . Shares have lost about 8.8% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is KB Home due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
KB Home Q3 Earnings & Revenues Beat Estimates as BTO Mix Lifts Margin
KB Home reported third-quarter fiscal 2026 earnings of $1.05 per share, beating the Zacks Consensus Estimate of 88 cents by 19.3%. Earnings declined 34.8% from $1.61 per share in the year-ago quarter.
Total revenues of $1.30 billion surpassed the consensus mark of $1.29 billion by 0.4% but declined 20% year over year. Results reflected lower deliveries and continued pricing pressure, partly offset by progress in the company’s Built to Order model. BTO homes represented 74% of deliveries, supporting sequential improvement in housing gross margin.
KB Home’s Homebuilding Highlights
Housing revenues totaled $1.29 billion, down 20% from $1.61 billion in the prior-year quarter. The decline primarily reflected a 19% decrease in homes delivered and a modest decline in the overall average selling price (ASP).
Homes delivered were 2,732 compared with 3,393 a year ago. The backlog conversion rate was 60% compared with 71% in the prior-year period, reflecting the shift toward a higher mix of Built to Order homes. The ASP was $473,000 compared with $475,700 a year ago.
Net orders decreased 12% year over year to 2,604 homes, while net order value fell 8% to $1.21 billion. Monthly net orders per community declined to 3.1 from 3.8, reflecting a more cautious homebuying environment.
The cancellation rate increased to 18% of gross orders from 17%. However, average community count rose 8% to 279, while ending community count increased 5% to 277. Management cited higher mortgage rates, weaker consumer confidence and affordability pressure as factors weighing on demand.
Ending backlog increased year over year for the first time in four years. Backlog rose 2% to 4,398 homes, while backlog value increased 3% to $2.05 billion. The higher backlog provides visibility into future deliveries as the company continues its Built to Order strategy.
KB Home Posts Sequential Margin Improvement
Homebuilding operating income was $67.1 million compared with $131.2 million a year ago. The corresponding margin contracted to 5.2% from 8.1%. Excluding inventory-related charges, the operating margin was 5.4% compared with 8.8%.
Housing gross margin was 16.5%, down from 18.2% a year earlier. Excluding inventory-related charges, adjusted housing gross margin was 16.8% versus 18.9%. The adjusted margin improved from 15.7% in the second quarter, helped by the stronger BTO delivery mix. SG&A expenses represented 11.3% of housing revenues versus 10% a year ago.
KBH Maintains a Solid Liquidity Position
KBH ended the quarter with total liquidity of $942.4 million, comprising $159 million of cash and $783.4 million of available capacity under its unsecured revolving credit facility. Inventories increased 5% from Nov. 30, 2025, to $5.98 billion.
Land and land development investments totaled $722.3 million in the quarter, up 40% year over year. KBH repurchased 0.9 million shares for $50 million during the quarter. The debt-to-capital was 35.7%, while book value per share increased 4% year over year to $62.56.
KB Home Moderates Q4 Expectations
For the fourth quarter of fiscal 2026, KB Home expects deliveries of 3,000-3,500 homes and housing revenues of $1.45-$1.65 billion. Housing gross margin is projected between 16% and 16.6%, assuming no inventory-related charges, while the SG&A ratio is expected to be between 10.3% and 10.9%. The effective tax rate is anticipated to be approximately 26%, with ending community count projected at 270-275.
For fiscal 2026, KB Home continues to expect deliveries of 10,500-11,000 homes, unchanged from its prior outlook. However, the company narrowed its housing revenue guidance to $4.90-$5.10 billion from $4.90-$5.30 billion previously. KBH now expects a housing gross margin of 16-16.2%, assuming no inventory-related charges, compared with its previous projection of 16.1-16.5%. The SG&A expense ratio is now expected at 11.5-11.7%, versus 11.4-11.8% previously.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.74% due to these changes.
VGM Scores
Currently, KB Home has a poor Growth Score of F, a score with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, KB Home has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
View the Zacks #1 Rank List
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KB Home (KBH) Down 8.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for KB Home (KBH - Free Report) . Shares have lost about 8.8% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is KB Home due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
KB Home Q3 Earnings & Revenues Beat Estimates as BTO Mix Lifts Margin
KB Home reported third-quarter fiscal 2026 earnings of $1.05 per share, beating the Zacks Consensus Estimate of 88 cents by 19.3%. Earnings declined 34.8% from $1.61 per share in the year-ago quarter.
Total revenues of $1.30 billion surpassed the consensus mark of $1.29 billion by 0.4% but declined 20% year over year. Results reflected lower deliveries and continued pricing pressure, partly offset by progress in the company’s Built to Order model. BTO homes represented 74% of deliveries, supporting sequential improvement in housing gross margin.
KB Home’s Homebuilding Highlights
Housing revenues totaled $1.29 billion, down 20% from $1.61 billion in the prior-year quarter. The decline primarily reflected a 19% decrease in homes delivered and a modest decline in the overall average selling price (ASP).
Homes delivered were 2,732 compared with 3,393 a year ago. The backlog conversion rate was 60% compared with 71% in the prior-year period, reflecting the shift toward a higher mix of Built to Order homes. The ASP was $473,000 compared with $475,700 a year ago.
Net orders decreased 12% year over year to 2,604 homes, while net order value fell 8% to $1.21 billion. Monthly net orders per community declined to 3.1 from 3.8, reflecting a more cautious homebuying environment.
The cancellation rate increased to 18% of gross orders from 17%. However, average community count rose 8% to 279, while ending community count increased 5% to 277. Management cited higher mortgage rates, weaker consumer confidence and affordability pressure as factors weighing on demand.
Ending backlog increased year over year for the first time in four years. Backlog rose 2% to 4,398 homes, while backlog value increased 3% to $2.05 billion. The higher backlog provides visibility into future deliveries as the company continues its Built to Order strategy.
KB Home Posts Sequential Margin Improvement
Homebuilding operating income was $67.1 million compared with $131.2 million a year ago. The corresponding margin contracted to 5.2% from 8.1%. Excluding inventory-related charges, the operating margin was 5.4% compared with 8.8%.
Housing gross margin was 16.5%, down from 18.2% a year earlier. Excluding inventory-related charges, adjusted housing gross margin was 16.8% versus 18.9%. The adjusted margin improved from 15.7% in the second quarter, helped by the stronger BTO delivery mix. SG&A expenses represented 11.3% of housing revenues versus 10% a year ago.
KBH Maintains a Solid Liquidity Position
KBH ended the quarter with total liquidity of $942.4 million, comprising $159 million of cash and $783.4 million of available capacity under its unsecured revolving credit facility. Inventories increased 5% from Nov. 30, 2025, to $5.98 billion.
Land and land development investments totaled $722.3 million in the quarter, up 40% year over year. KBH repurchased 0.9 million shares for $50 million during the quarter. The debt-to-capital was 35.7%, while book value per share increased 4% year over year to $62.56.
KB Home Moderates Q4 Expectations
For the fourth quarter of fiscal 2026, KB Home expects deliveries of 3,000-3,500 homes and housing revenues of $1.45-$1.65 billion. Housing gross margin is projected between 16% and 16.6%, assuming no inventory-related charges, while the SG&A ratio is expected to be between 10.3% and 10.9%. The effective tax rate is anticipated to be approximately 26%, with ending community count projected at 270-275.
For fiscal 2026, KB Home continues to expect deliveries of 10,500-11,000 homes, unchanged from its prior outlook. However, the company narrowed its housing revenue guidance to $4.90-$5.10 billion from $4.90-$5.30 billion previously. KBH now expects a housing gross margin of 16-16.2%, assuming no inventory-related charges, compared with its previous projection of 16.1-16.5%. The SG&A expense ratio is now expected at 11.5-11.7%, versus 11.4-11.8% previously.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.74% due to these changes.
VGM Scores
Currently, KB Home has a poor Growth Score of F, a score with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, KB Home has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.