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

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KB Home (KBH - Free Report) closed at $80.17 in the latest trading session, marking a +0.58% move from the prior day. The stock's performance was ahead of the S&P 500's daily gain of 0.47%. At the same time, the Dow added 0.13%, and the tech-heavy Nasdaq gained 0.51%.

Heading into today, shares of the homebuilder had gained 8.02% over the past month, lagging the Construction sector's gain of 8.1% and outpacing the S&P 500's loss of 4.45% in that time.

Market participants will be closely following the financial results of KB Home in its upcoming release. It is anticipated that the company will report an EPS of $2.04, marking a 13.33% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.73 billion, showing an 8.88% escalation compared to the year-ago quarter.

KBH's full-year Zacks Consensus Estimates are calling for earnings of $8.38 per share and revenue of $6.84 billion. These results would represent year-over-year changes of +19.2% and +6.68%, respectively.

It's also important for investors to be aware of any recent modifications to analyst estimates for KB Home. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.94% upward. At present, KB Home boasts a Zacks Rank of #2 (Buy).

Looking at valuation, KB Home is presently trading at a Forward P/E ratio of 9.51. This valuation marks a premium compared to its industry's average Forward P/E of 8.73.

One should further note that KBH currently holds a PEG ratio of 0.8. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Building Products - Home Builders was holding an average PEG ratio of 0.87 at yesterday's closing price.

The Building Products - Home Builders industry is part of the Construction sector. This industry, currently bearing a Zacks Industry Rank of 31, finds itself in the top 13% echelons 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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