In the latest close session, KB Home (KBH) was down 1.62% at $57.56. The stock fell short of the S&P 500, which registered a gain of 0.41% for the day. On the other hand, the Dow registered a loss of 0.83%, and the technology-centric Nasdaq increased by 0.91%.
Heading into today, shares of the homebuilder had gained 2.76% over the past month, lagging the Construction sector's gain of 4.76% and outpacing the S&P 500's gain of 0.38%.
Market participants will be closely following the financial results of KB Home in its upcoming release. The company is predicted to post an EPS of $0.53, indicating a 64.43% decline compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $1.11 billion, indicating a 20.56% decline compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.14 per share and a revenue of $5.58 billion, representing changes of -36.5% and -10.45%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for KB Home. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 23.77% lower. Right now, KB Home possesses a Zacks Rank of #5 (Strong Sell).
Investors should also note KB Home's current valuation metrics, including its Forward P/E ratio of 14.12. This valuation marks a premium compared to its industry average Forward P/E of 13.12.
We can additionally observe that KBH currently boasts a PEG ratio of 7.72. 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. KBH's industry had an average PEG ratio of 1.83 as of yesterday's close.
The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 242, which puts it in the bottom 2% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow KBH in the coming trading sessions, be sure to utilize Zacks.com.
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KB Home (KBH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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