Back to top

Image: Bigstock

Should Value Investors Buy KB Home (KBH) Stock?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company value investors might notice is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.32, while its industry has an average P/E of 11.37. KBH's Forward P/E has been as high as 12.27 and as low as 7.56, with a median of 9.44, all within the past year.

Investors should also note that KBH holds a PEG ratio of 0.95. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KBH's PEG compares to its industry's average PEG of 1.16. Over the last 12 months, KBH's PEG has been as high as 1.32 and as low as 0.92, with a median of 1.09.

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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


KB Home (KBH) - free report >>

Published in