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KB Home
(NYSE:KBH)
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Rating:64Neutral
Price Target:
$61.00
▲(12.38% Upside)
Action:Reiterated
Date:07/10/26
KBH scores as a moderate-quality cyclical: financial results show clear cooling (declining revenue and meaningful margin compression with more volatile cash flow), which is the main constraint on the score. Offsetting this, the earnings call outlined credible sequential improvement drivers (margin recovery outlook, backlog strength, and capital returns), and valuation is reasonably supportive (P/E ~13.5 with a ~1.76% yield). Technicals are mixed/neutral, suggesting stabilization rather than strong momentum.
Positive Factors
BTO strategy & backlog growth
A deliberate shift to built-to-order (73% of net orders) and a backlog up 26% sequentially provide durable revenue visibility and pricing leverage. Sold‑not‑started inventory (~1.5k homes) lets management sequence production to protect margins and renegotiate supplier terms, reducing finished-inventory risk and smoothing cash flow across cycles.
Negative Factors
Persistent margin compression
Margins have materially contracted from prior years, reflecting sustained price and cost pressure. Lower gross and net margins reduce earnings power and ROE, limiting reinvestment and cushioning against interest or material cost shocks. If pricing recovery lags, sustainable profitability could remain impaired for several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
BTO strategy & backlog growth
A deliberate shift to built-to-order (73% of net orders) and a backlog up 26% sequentially provide durable revenue visibility and pricing leverage. Sold‑not‑started inventory (~1.5k homes) lets management sequence production to protect margins and renegotiate supplier terms, reducing finished-inventory risk and smoothing cash flow across cycles.
Read all positive factors
KB Home Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows revenue distribution across different regions, highlighting where KB Home is performing well and identifying areas with growth opportunities or potential risks.
Shows revenue distribution across different regions, highlighting where KB Home is performing well and identifying areas with growth opportunities or potential risks.
Data provided by:
The Fly
The FlyKB Home (KBH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.45B
Dividend Yield1.76%
Average Volume (3M)1.43M
Price to Earnings (P/E)13.1
Beta (1Y)0.54
Revenue Growth-17.52%
EPS Growth-45.77%
CountryUS
Employees2,384
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)4.20
Shares Outstanding61,309,727
10 Day Avg. Volume987,713
30 Day Avg. Volume1,426,500
Financial Highlights & Ratios
PEG Ratio-0.37
Price to Book (P/B)1.12
Price to Sales (P/S)0.70
P/FCF Ratio15.16
Enterprise Value/Market Cap1.45
Enterprise Value/Revenue0.91
Enterprise Value/Gross Profit5.37
Enterprise Value/Ebitda12.97
Forecast
1Y Price Target
$57.88Price Target Upside6.62% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)3.33
Revenue Forecast (FY)$5.12B
KB Home Business Overview & Revenue Model
Company Description
KB Home functions as a prominent residential construction enterprise across the United States. Its operations are strategically divided into four key geographical areas: the West Coast, Southwest, Central, and Southeast regions. The company is eng...
How the Company Makes Money
KB Home generates most of its revenue from homebuilding operations, primarily through the sale of newly constructed homes to individual homebuyers. Revenue is generally recognized at the time of closing, when title transfers and the buyer takes ow...
KB Home Earnings Call Summary
Earnings Call Date:Jun 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Sep 23, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: strong operational execution and strategic progress (notably the return to a built-to-order model, faster build times, inventory reduction, backlog growth, and disciplined capital returns) that position the company for sequential improvement in the back half of fiscal 2026. These positives were offset by significant year-over-year declines in revenue, margins, and profitability driven by a softer spring selling season, pricing pressure and higher relative costs. Management provided concrete guidance for sequential margin and volume improvement, but near-term financials remain impacted by the YoY deterioration.Positive Updates
Built-to-Order (BTO) Strategic Shift and Backlog Growth
Net orders of 3.32k in Q2 with 73% being built-to-order; deliveries BTO mix was ~60% in Q2 and management expects ~70% BTO deliveries by Q4. Backlog ended at 4.53k homes (up 26% sequentially) and total homes in backlog are up ~45% since the start of the year. Management cited 1.5k sold-not-started homes as a negotiable pipeline asset.
Negative Updates
Significant YoY Revenue and Delivery Declines
Housing revenues of $1.11B in Q2 declined ~27% YoY (vs $1.52B prior-year quarter). Number of homes delivered decreased ~23% YoY, and ASP for delivered homes declined ~5% YoY (though ASP was $462k, up 2% sequentially).
Read all updates
Q2-2026 Updates
Positive
Negative
Built-to-Order (BTO) Strategic Shift and Backlog Growth
Net orders of 3.32k in Q2 with 73% being built-to-order; deliveries BTO mix was ~60% in Q2 and management expects ~70% BTO deliveries by Q4. Backlog ended at 4.53k homes (up 26% sequentially) and total homes in backlog are up ~45% since the start of the year. Management cited 1.5k sold-not-started homes as a negotiable pipeline asset.
Read all positive updates
Company Guidance
KB Home guided to Q3 deliveries of 2.6k–2.8k homes and housing revenues of $1.2–$1.35B, and narrowed full‑year 2026 deliveries to 10.5k–11.0k with housing revenues of $4.9–$5.3B; housing gross profit margin is forecast at 16.0%–16.6% in Q3 and 16.1%–16.5% for the full year (assuming no inventory charges), up from Q2’s 15.2% (15.7% ex‑charges) with the Q3 midpoint of 16.3% implying ~60 bps sequential improvement and Q4 implying roughly a 100 bps further step; SG&A is expected to fall to 11.3%–11.9% in Q3 (11.4%–11.8% FY) from Q2’s 12.7%, the effective tax rate is pegged at 19%–21% for Q3 (22%–24% FY) assuming option exercises, and the company plans $50M–$100M of share repurchases in Q3 (Q2 repurchases: 1.4M shares/$75M; YTD: 2.2M/$125M; $775M remaining authorization); more than 80% of Q3 homes are already in backlog (quarter‑end backlog 4.53k, +26% sequentially and +45% YTD; backlog conversion rate in Q2 was 66% vs. 70% LY), homes in process total 3.99k (77% sold) with >1.5k sold‑not‑started, finished unsold inventory down to 11% of production, Q2 build time on BTO homes 100 days (‑8 days sequentially), Q2 net orders 3.32k (73% BTO) with Q2 BTO deliveries ~60% and a target of ~70% BTO by Q4, and the balance sheet / capital plan includes Q2 land investment ≈$500M (YTD $1.06B), inventory ~$5.7B, liquidity $1.12B (cash $200M, $923M revolver availability, $275M drawn), debt‑to‑capital 34.1%, book value per share ≈$62, and Q2 net income $27.3M / diluted EPS $0.43.KB Home Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
68
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.50B | 6.24B | 6.93B | 6.41B | 6.90B | 5.72B |
| Gross Profit | 932.11M | 1.17B | 1.47B | 1.37B | 1.68B | 1.25B |
| EBITDA | 385.60M | 591.49M | 888.19M | 807.69M | 1.10B | 704.83M |
| Net Income | 272.12M | 428.79M | 655.02M | 590.18M | 816.67M | 564.75M |
Balance Sheet | ||||||
| Total Assets | 6.78B | 6.72B | 6.94B | 6.65B | 6.65B | 5.84B |
| Cash, Cash Equivalents and Short-Term Investments | 199.82M | 230.44M | 599.19M | 727.34M | 330.20M | 292.14M |
| Total Debt | 2.00B | 1.73B | 1.71B | 1.72B | 2.37B | 1.71B |
| Total Liabilities | 2.98B | 2.82B | 2.88B | 2.84B | 2.99B | 2.82B |
| Stockholders Equity | 3.80B | 3.90B | 4.06B | 3.81B | 3.66B | 3.02B |
Cash Flow | ||||||
| Free Cash Flow | 362.50M | 287.28M | 323.41M | 1.05B | 138.18M | -76.69M |
| Operating Cash Flow | 411.06M | 335.68M | 362.72M | 1.08B | 183.42M | -37.30M |
| Investing Cash Flow | -74.62M | -61.80M | -50.12M | -58.06M | -71.77M | -38.08M |
| Financing Cash Flow | -446.62M | -642.63M | -440.75M | -627.49M | -73.58M | -315.01M |
KB Home Technical Analysis
Negative
54.28
Price Trends
52.58
Positive
53.90
Positive
57.26
Negative
Market Momentum
1.21
Positive
45.84
Neutral
5.53
Positive
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 54.28 is below the 20-day moving average (MA) of 57.35, above the 50-day MA of 52.58, and below the 200-day MA of 57.26, indicating a neutral trend. The MACD of 1.21 indicates Positive momentum. The RSI at 45.84 is Neutral, neither overbought nor oversold. The STOCH value of 5.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KBH.
KB Home Risk Analysis
KB Home disclosed 1 risk factors in its most recent earnings report. KB Home reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
KB Home Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.61B | 10.55 | 10.85% | ― | -8.99% | -22.26% | |
73 Outperform | $4.46B | 21.90 | 13.10% | ― | 7.26% | 6.61% | |
70 Outperform | $3.77B | 10.76 | 11.42% | ― | -1.83% | -30.18% | |
66 Neutral | $5.04B | 13.47 | 7.40% | 2.62% | -10.63% | -45.01% | |
64 Neutral | $3.45B | 13.05 | 9.01% | 1.76% | -17.52% | -45.77% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
KBH
KB Home
54.81
0.45
0.83%
MHO
M/I Homes
146.07
26.48
22.14%
MTH
Meritage
73.83
3.09
4.36%
SKY
Champion Homes
80.16
14.14
21.42%
TMHC
Taylor Morrison
71.87
7.34
11.37%
KB Home Corporate Events
Executive/Board Changes
KB Home CFO Robert Dillard Announces Upcoming Resignation
Neutral
May 1, 2026
On April 29, 2026, KB Home announced that Executive Vice President and Chief Financial Officer Robert R. Dillard had resigned, with his departure effective May 8, 2026. The company stated that Dillard’s decision to leave was not due to any d...
Business Operations and StrategyShareholder Meetings
KB Home Shareholders Back Board, Pay and Auditor
Positive
Apr 24, 2026
On April 23, 2026, KB Home held its 2026 Annual Meeting of Stockholders, where shareholders overwhelmingly re-elected all ten nominated directors, each receiving between roughly 95% and 99.6% of votes cast in favor, underscoring strong investor su...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.