KB Home (KBH) AI Stock Analysis

• Market Cap: $4.39B
• Dividend Yield: 1.63%
• Average Volume (3M): 1.34M
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.83
• Revenue Growth: -0.95%
• EPS Growth: -9.08%
• Country: US
• Employees: 2,384
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 1.61
• Shares Outstanding: 68,050,186
• 10 Day Avg. Volume: 1,372,167
• 30 Day Avg. Volume: 1,340,972
• PEG Ratio: 0.47
• Price to Book (P/B): 1.52
• Price to Sales (P/S): 0.89
• P/FCF Ratio: 19.12
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 0.89
• Enterprise Value/Gross Profit: 4.33
• Enterprise Value/Ebitda: 8.01
• 1Y Price Target: $65.44
• Price Target Upside: 6.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 70 Outperform
• Price Target: $67.00 ▲(9.53% Upside)

KB Home's overall score is driven by strong earnings performance and attractive valuation metrics, despite challenges in cash flow and revenue growth. The technical analysis suggests potential for recovery if market conditions improve. The company's strategic focus on operational efficiencies and shareholder returns provides a positive outlook, though regional pressures remain a concern.

Positive Factors

Operational Efficiency

Improved operational efficiency through reduced build times and cost management enhances profitability and customer satisfaction, supporting long-term competitiveness.

Shareholder Returns

Significant share repurchases reflect strong cash flow management and a commitment to enhancing shareholder value, indicating confidence in future performance.

Market Conditions

Favorable market conditions with declining mortgage rates boost housing demand, providing a supportive environment for revenue growth in the coming months.

Negative Factors

Order and Backlog Decline

Declines in net orders and backlog suggest potential future revenue challenges, indicating a need for strategic adjustments to sustain growth.

Cash Flow Challenges

Substantial reduction in free cash flow highlights liquidity concerns, which could impact the company's ability to invest in growth and manage debt effectively.

Regional Market Pressures

Regional market pressures from high prices and supply increases may limit sales growth and margin expansion in key markets, affecting overall performance.

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 through the sale of newly constructed homes, which is its primary revenue stream. The company offers a range of home types and price points, allowing it to cater to different market segments. Additionally, KB Home earns money from land sales and the sale of homes in joint ventures. The company also benefits from its direct relationships with customers, enabling it to offer personalized home design features, which can command higher prices. Significant partnerships with suppliers and subcontractors help KB Home manage construction costs and maintain quality, further contributing to its profitability. Economic factors, such as housing demand, interest rates, and market conditions, also play a crucial role in influencing its earnings.

KB Home Financial Statement Overview

Summary

KB Home demonstrates strong profitability with a robust gross profit margin and healthy net profit margin. The balance sheet is stable with a good equity ratio and manageable debt levels. However, challenges are noted in cash flow generation, with a significant decrease in free cash flow and low operating cash flow to net income ratio, indicating potential liquidity risks.

Income Statement

KB Home's income statement shows a robust gross profit margin of 20.5% in TTM, reflecting strong operational efficiency. The net profit margin stands at 8.5%, indicating healthy profitability. However, revenue growth has been slightly negative at -3.7% over the last year, raising concerns about future growth potential. EBIT and EBITDA margins are solid at 10.1% and 9.8%, respectively, underscoring efficient cost management.

Balance Sheet

The balance sheet is strong with an equity ratio of 56.9%, suggesting a stable financial structure. The debt-to-equity ratio is manageable at 0.47, indicating a prudent use of debt. Return on equity is healthy at 14.2%, showcasing the company's ability to generate returns on shareholder investments. However, slight increases in debt levels warrant caution.

Cash Flow

Cash flow analysis reveals challenges with a significant decrease in free cash flow by 80% over the year, marking potential liquidity risks. The operating cash flow to net income ratio is low at 0.19, suggesting weaker cash generation relative to reported earnings. Nonetheless, free cash flow to net income remains positive at 0.11, indicating some level of cash return from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.67B	6.93B	6.41B	6.90B	5.72B	4.18B
Gross Profit	1.37B	1.48B	1.37B	1.69B	1.26B	802.72M
EBITDA	738.69M	888.19M	778.95M	1.10B	723.99M	392.44M
Net Income	565.37M	655.02M	590.18M	816.67M	564.75M	296.24M
Balance Sheet
Total Assets	7.02B	6.94B	6.65B	6.65B	5.84B	5.36B
Cash, Cash Equivalents and Short-Term Investments	308.86M	599.19M	727.34M	330.20M	290.76M	681.19M
Total Debt	1.89B	1.71B	1.72B	1.87B	1.71B	1.78B
Total Liabilities	3.03B	2.88B	2.84B	2.99B	2.82B	2.69B
Stockholders Equity	3.99B	4.06B	3.81B	3.66B	3.02B	2.67B
Cash Flow
Free Cash Flow	64.56M	323.41M	1.05B	138.18M	-76.69M	281.84M
Operating Cash Flow	106.84M	362.72M	1.08B	183.42M	-37.30M	310.68M
Investing Cash Flow	-41.55M	-50.12M	-58.06M	-71.77M	-38.08M	-26.56M
Financing Cash Flow	-398.60M	-440.75M	-627.49M	-73.58M	-315.01M	-56.44M

KB Home Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 61.17
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• 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 61.17 is below the 20-day moving average (MA) of 64.22, below the 50-day MA of 62.69, and above the 200-day MA of 59.15, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 40.67 is Neutral, neither overbought nor oversold. The STOCH value of 52.87 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
MHO	80 Outperform	$3.78B	7.85	17.56%	―	7.39%	-1.37%
TPH	76 Outperform	$2.96B	8.63	11.38%	―	-3.59%	-10.82%
SKY	74 Outperform	$3.93B	18.50	14.39%	―	16.87%	54.47%
KBH	70 Outperform	$4.39B	9.04	13.06%	1.63%	-0.95%	-9.08%
TMHC	70 Outperform	$6.57B	7.67	15.59%	―	13.77%	28.57%
MTH	68 Neutral	$5.14B	8.52	12.58%	2.39%	-3.72%	-23.00%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

KB Home Corporate Events

KB Home Boosts Executive Salaries Amid Talent Retention

On July 10, 2025, KB Home‘s board of directors approved increases to the base salaries of certain executive officers, effective July 1, 2025. This decision reflects the company’s commitment to retaining top talent and may impact its operational costs and compensation structure.