KB Home (KBH) AI Stock Analysis

• Market Cap: $3.97B
• Dividend Yield: 1.74%
• Average Volume (3M): 1.56M
• Price to Earnings (P/E): 6.8
• Beta (1Y): 1.21
• Revenue Growth: 5.54%
• EPS Growth: 11.25%
• Country: US
• Employees: 2,384
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Residential Construction
• EPS (TTM): 8.20
• Shares Outstanding: 71,447,230
• 10 Day Avg. Volume: 2,305,369
• 30 Day Avg. Volume: 1,560,619
• PEG Ratio: 0.60
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.62
• Price to Cash Flow (P/CF): 3.00
• P/FCF Ratio: 3.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $68.08
• Price Target Upside: 18.32% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 14

KB Home's overall score reflects strong financial performance and attractive valuation, tempered by technical analysis indicating bearish momentum. The earnings call highlighted both positive long-term prospects and immediate challenges, such as revised revenue guidance and operational hurdles. Investors should weigh the company's strong order numbers and efficient cost management against the current softer market demand and delivery shortfalls.

Positive Factors

Gross Margin

KB Home's stable gross margin guidance was not expected and is a positive distinction from its peers.

Sales Trends

Sales trends have rebounded to 1+/week/store after KBH cut base prices.

Strategic Growth

KBH grew its land position for the fourth consecutive quarter, indicating a strategic investment in future growth.

Negative Factors

Macroeconomic Concerns

Concerning macro factors such as higher rates and rising new home supply nationally are present.

Order Decline

Net orders were significantly down year-over-year and below forecast, leading to a lowered revenue outlook.

Revenue Outlook

KBH lowers revenue outlook after orders miss, with net orders 17% down year-over-year.

KB Home Business Overview & Revenue Model

Company Description

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also offers financial services, such as insurance products and title services. It has operations in Arizona, California, Colorado, Florida, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California.

How the Company Makes Money

KB Home generates revenue primarily through the construction and sale of residential properties. The company operates a build-to-order business model, allowing customers to personalize various aspects of their homes, which enhances customer satisfaction and increases sales potential. Revenue streams for KB Home include the sale of single-family homes, townhomes, and condominiums. The company also benefits from strategic partnerships with suppliers and contractors to manage costs and optimize the construction process. Additionally, KB Home's focus on sustainable and energy-efficient building practices can attract environmentally conscious buyers, contributing to its revenue. The company's financial performance is influenced by factors such as housing market conditions, interest rates, and economic trends.

KB Home Financial Statement Overview

Summary

KB Home demonstrates strong revenue growth and efficient cost management with a high Gross Profit Margin. The balance sheet is robust, with a favorable Debt-to-Equity Ratio and strong equity base, enhancing financial stability. However, cash flow metrics show challenges, particularly in free cash flow growth, requiring attention for future performance.

Income Statement

KB Home has demonstrated strong growth with a Revenue Growth Rate of 8.1% from 2023 to 2024. The Gross Profit Margin is exceptionally high at 100%, indicating effective cost management. However, the Net Profit Margin of 9.5% suggests room for improvement in profitability efficiency. The EBIT Margin is healthy at 11%, reflecting solid operational performance.

Balance Sheet

The company's Debt-to-Equity Ratio is 0.42, indicating a balanced use of debt and equity, which is relatively low risk. Return on Equity is strong at 16.1%, showcasing effective use of equity to generate profits. The Equity Ratio of 58.6% indicates a strong reliance on equity financing, which enhances financial stability.

Cash Flow

The Free Cash Flow Growth Rate is negative, indicating a decrease in cash flow generated after capital expenditures. However, the Operating Cash Flow to Net Income Ratio of 0.55 suggests moderate efficiency in converting net income into cash. The Free Cash Flow to Net Income Ratio is 0.49, showing a reasonable conversion of income into cash flow, despite recent declines.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
6.93B	6.41B	6.90B	5.72B	4.18B
	Gross Profit
1.47B	1.37B	1.69B	1.26B	802.72M
	EBIT
763.91M	718.74M	1.04B	661.34M	316.47M
	EBITDA
822.89M	778.95M	1.10B	723.99M	392.44M
	Net Income Common Stockholders
655.02M	590.18M	816.67M	564.75M	296.24M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
597.97M	727.34M	328.52M	290.76M	681.19M
	Total Assets
6.94B	6.65B	6.65B	5.84B	5.36B
	Total Debt
1.71B	1.72B	2.35B	1.69B	1.75B
	Net Debt
1.11B	989.09M	2.02B	1.39B	1.07B
	Total Liabilities
2.88B	2.84B	2.99B	2.82B	2.69B
	Stockholders Equity
4.06B	3.81B	3.66B	3.02B	2.67B
Cash Flow		Free Cash Flow
323.41M	1.05B	138.18M	-76.69M	281.84M
	Operating Cash Flow
362.72M	1.08B	183.42M	-37.30M	310.68M
	Investing Cash Flow
-50.12M	-58.06M	-71.77M	-38.08M	-26.56M
	Financing Cash Flow
-440.75M	-627.49M	-73.58M	-315.01M	-56.44M

KB Home Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 57.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KBH, the sentiment is Negative. The current price of 57.54 is below the 20-day moving average (MA) of 59.85, below the 50-day MA of 62.45, and below the 200-day MA of 73.27, indicating a bearish trend. The MACD of -1.32 indicates Positive momentum. The RSI at 40.18 is Neutral, neither overbought nor oversold. The STOCH value of 25.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KBH.

KB Home Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DHI	78 Outperform	$38.54B	8.64	19.35%	1.09%	2.12%	1.63%
PHM	74 Outperform	$20.41B	6.89	27.40%	0.83%	11.74%	25.66%
TOL	69 Neutral	$9.78B	6.77	20.38%	0.91%	5.86%	12.20%
LEN	68 Neutral	$28.47B	7.89	14.97%	1.80%	2.03%	-3.80%
KBH	66 Neutral	$3.97B	6.78	15.60%	1.74%	5.54%	11.25%
NVR	66 Neutral	$22.00B	14.60	39.23%	―	10.81%	10.16%
Sector *	59 Neutral	$11.22B	10.13	-1.22%	3.96%	1.32%	-18.57%

KB Home Corporate Events

KB Home Sets 2024 Incentive Awards for Executives

On January 23, 2025, KB Home’s board of directors determined the 2024 fiscal year incentive awards for eligible participants under the company’s annual incentive compensation program. The awards included payouts in cash and restricted stock, which will vest over three years starting January 25, 2026. Notably, Jeffery T. Mezger received a substantial incentive award, highlighting his key role in the company.