KB Home (KBH) Gains As Market Dips: What You Should Know
In the latest trading session, KB Home (KBH) closed at $43.47, marking a +1.97% move from the previous day. This move outpaced the S&P 500's daily loss of 0.54%. At the same time, the Dow added 0.97%, and the tech-heavy Nasdaq lost 2.41%.
Prior to today's trading, shares of the homebuilder had gained 4.97% over the past month. This has outpaced the Construction sector's gain of 0.8% and the S&P 500's loss of 1.04% in that time.
Wall Street will be looking for positivity from KBH as it approaches its next earnings report date. In that report, analysts expect KBH to post earnings of $0.87 per share. This would mark year-over-year growth of 38.1%. Meanwhile, our latest consensus estimate is calling for revenue of $1.21 billion, up 12.47% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.11 per share and revenue of $5.91 billion. These totals would mark changes of +63.26% and +41.18%, 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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. KBH is currently sporting a Zacks Rank of #2 (Buy).
Digging into valuation, KBH currently has a Forward P/E ratio of 8.34. For comparison, its industry has an average Forward P/E of 8.34, which means KBH is trading at a no noticeable deviation to the group.
Investors should also note that KBH has a PEG ratio of 0.39 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. The Building Products - Home Builders industry currently had an average PEG ratio of 0.75 as of yesterday's close.
The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 33, putting it in the top 13% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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