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Are Investors Undervaluing KB Home (KBH) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
KB Home (KBH - Free Report) is a stock many investors are watching right now. KBH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.01 right now. For comparison, its industry sports an average P/E of 9.70. Over the past 52 weeks, KBH's Forward P/E has been as high as 12.55 and as low as 5.61, with a median of 8.53.
Investors should also note that KBH holds a PEG ratio of 1.03. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KBH's industry currently sports an average PEG of 1.10. KBH's PEG has been as high as 1.20 and as low as 0.31, with a median of 0.90, all within the past year.
Another notable valuation metric for KBH is its P/B ratio of 1.07. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.25. Over the past 12 months, KBH's P/B has been as high as 1.17 and as low as 0.77, with a median of 1.01.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KBH has a P/S ratio of 0.55. This compares to its industry's average P/S of 0.59.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home is likely undervalued currently. And when considering the strength of its earnings outlook, KBH sticks out at as one of the market's strongest value stocks.
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Are Investors Undervaluing KB Home (KBH) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
KB Home (KBH - Free Report) is a stock many investors are watching right now. KBH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.01 right now. For comparison, its industry sports an average P/E of 9.70. Over the past 52 weeks, KBH's Forward P/E has been as high as 12.55 and as low as 5.61, with a median of 8.53.
Investors should also note that KBH holds a PEG ratio of 1.03. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KBH's industry currently sports an average PEG of 1.10. KBH's PEG has been as high as 1.20 and as low as 0.31, with a median of 0.90, all within the past year.
Another notable valuation metric for KBH is its P/B ratio of 1.07. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.25. Over the past 12 months, KBH's P/B has been as high as 1.17 and as low as 0.77, with a median of 1.01.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KBH has a P/S ratio of 0.55. This compares to its industry's average P/S of 0.59.
Value investors will likely look at more than just these metrics, but the above data helps show that KB Home is likely undervalued currently. And when considering the strength of its earnings outlook, KBH sticks out at as one of the market's strongest value stocks.