Markets

KB Home (KBH) Stock Sinks As Market Gains: What You Should Know

KB Home (KBH) closed the most recent trading day at $34.87, moving -0.63% from the previous trading session. This change lagged the S&P 500's daily gain of 0.42%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.66%.

Prior to today's trading, shares of the homebuilder had lost 0.93% over the past month. This has lagged the Construction sector's gain of 2.08% and the S&P 500's gain of 4.09% in that time.

Wall Street will be looking for positivity from KBH as it approaches its next earnings report date. On that day, KBH is projected to report earnings of $1.31 per share, which would represent year-over-year growth of 36.46%. Our most recent consensus estimate is calling for quarterly revenue of $1.60 billion, up 18.54% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.85 per share and revenue of $4.59 billion. These totals would mark changes of +66.67% and +0.92%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for KBH. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.08% lower within the past month. KBH currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, KBH is holding a Forward P/E ratio of 12.31. This represents a premium compared to its industry's average Forward P/E of 10.83.

Investors should also note that KBH has a PEG ratio of 1.32 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Building Products - Home Builders stocks are, on average, holding a PEG ratio of 1.19 based on yesterday's closing prices.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 15, putting it in the top 6% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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