KB Home (KBH) AI Stock Analysis

• Market Cap: $3.87B
• Dividend Yield: 1.76%
• Average Volume (3M): 1.08M
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.75
• Revenue Growth: -10.01%
• EPS Growth: -27.81%
• Country: US
• Employees: 2,384
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): N/A
• Shares Outstanding: 63,173,610
• 10 Day Avg. Volume: 1,130,593
• 30 Day Avg. Volume: 1,076,481
• PEG Ratio: -0.37
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 0.70
• P/FCF Ratio: 15.01
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 0.86
• Enterprise Value/Gross Profit: 4.58
• Enterprise Value/Ebitda: 9.11
• 1Y Price Target: $59.78
• Price Target Upside: -2.40% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.22
• Revenue Forecast (FY): $5.52B

• Rating: 66 Neutral
• Price Target: $64.00 ▲(4.49% Upside)

KBH scores in the mid-range primarily due to cooling fundamentals—declining 2025 revenue and margin compression with less robust free cash flow—partly offset by a low valuation and shareholder returns. Technical indicators are mixed and do not yet signal strong upside momentum, while earnings-call guidance highlights continued near-term margin and pricing/backlog pressure despite operational improvements.

Positive Factors

Balance-sheet resilience

Moderate leverage and sizable liquidity provide structural resilience across housing cycles. With debt meaningfully below equity and a sub-31% debt-to-capital ratio, KBH has capacity to fund operations, land acquisition, and buybacks while absorbing cyclical downturns without immediate refinancing stress.

Proven cash-generation capacity

Demonstrated ability to generate strong cash in favorable conditions and maintain positive operating cash flow in recent softer years supports lasting financial flexibility. This structurally enables capex, land buys, and sustained capital returns when cycle improves, despite sensitivity to working capital.

Operational improvements & BTO shift

Faster build times and a strategic shift toward built-to-order reduce spec inventory risk, shorten cash conversion, and increase pricing alignment with buyer demand. Sustained BTO mix growth can materially improve margin stability and reduce write-down risk from older, higher-cost spec homes.

Negative Factors

Revenue and margin pressure

Declining revenue and compressed net margins reflect weakening pricing power and/or rising costs. If these trends persist, they will structurally reduce return on invested capital, limit reinvestment capacity, and heighten sensitivity to interest rates and land-cost inflation over the medium term.

Declining free cash flow and volatility

Material FCF decline and historical volatility indicate sensitivity to working capital and the housing cycle. Persistent FCF weakness would constrain capital allocation choices—reducing ability to sustain buybacks, dividends, or invest in communities—eroding long-term financial flexibility.

Demand/backlog and spec-inventory issues

Falling average selling prices, a smaller backlog relative to delivery plans, and aging spec inventory raise the risk of margin erosion and slower revenue realization. These structural demand shifts and inventory mismatches can suppress profitability and extend the recovery period in weaker housing markets.

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 sale of newly constructed homes to individual buyers. The company earns money by acquiring land, developing residential communities, and constructing homes, which are then sold to consumers at a profit. Key revenue streams include the sale of homes, which accounts for the majority of its revenue, as well as revenue from homebuyer options and upgrades during the purchasing process. Additionally, KB Home benefits from strategic partnerships with suppliers and subcontractors that help manage construction costs and improve efficiency. Their focus on energy-efficient homes and sustainability also attracts environmentally conscious buyers, further enhancing their market position and contributing to revenue growth.

KB Home Financial Statement Overview

Summary

Profitable but cooling: 2025 revenue fell (-4.67%) and net margin compressed (~6.9% vs. ~9.5% in 2024). Balance sheet leverage appears moderate (debt below equity), but cash flow is uneven—still positive in 2024–2025 with lower 2025 free cash flow (-17.9%) and historical volatility.

Income Statement

KB Home remains solidly profitable, but results have clearly cooled versus the 2022 peak. Revenue declined in 2025 (-4.67%) after modest growth in 2024, and profitability compressed meaningfully: net margin fell to ~6.9% in 2025 from ~9.5% in 2024 (and ~11.8% in 2022). Gross margin and operating margins show the same downshift, indicating weaker pricing/power and/or higher costs. Strengths are continued positive earnings and still-respectable margins for the industry; the key weakness is the downtrend in growth and profitability over the last two years.

Balance Sheet

Leverage looks moderate overall, with debt around $1.69B against equity of ~$3.90B in 2025 (implying debt meaningfully below equity). Total assets are stable-to-slightly down from 2024, and equity remains large, supporting balance-sheet resilience. However, returns on equity were not provided for 2025 (and leverage ratios appear inconsistent in the dataset for 2025), limiting visibility into the latest period’s capital efficiency. Prior years show a stronger return profile (notably 2022–2024), but the main risk is that profitability pressure could reduce returns and balance-sheet flexibility if the housing cycle weakens further.

Cash Flow

Cash generation is positive but uneven. Operating cash flow was positive in 2025 (~$336M) and 2024 (~$363M), with positive free cash flow in both years, but free cash flow declined in 2025 (-17.87%), and the company has shown volatility (including negative operating and free cash flow in 2021). A major positive is the very strong cash generation in 2023 (over $1.0B of operating and free cash flow), demonstrating the model’s potential in stronger conditions; the downside is that the step-down since then highlights sensitivity to working capital and the housing cycle.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.24B	6.93B	6.41B	6.90B	5.72B
Gross Profit	1.18B	1.48B	1.39B	1.69B	1.26B
EBITDA	595.13M	888.19M	807.69M	1.10B	723.99M
Net Income	428.79M	655.02M	590.18M	816.67M	564.75M
Balance Sheet
Total Assets	6.72B	6.94B	6.65B	6.65B	5.84B
Cash, Cash Equivalents and Short-Term Investments	230.44M	599.19M	727.34M	330.20M	292.14M
Total Debt	1.73B	1.71B	1.72B	2.37B	1.71B
Total Liabilities	2.82B	2.88B	2.84B	2.99B	2.82B
Stockholders Equity	3.90B	4.06B	3.81B	3.66B	3.02B
Cash Flow
Free Cash Flow	290.25M	323.41M	1.05B	138.18M	-76.69M
Operating Cash Flow	338.65M	362.72M	1.08B	183.42M	-37.30M
Investing Cash Flow	-64.76M	-50.12M	-58.06M	-71.77M	-38.08M
Financing Cash Flow	-642.63M	-440.75M	-627.49M	-73.58M	-315.01M

KB Home Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 61.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KBH, the sentiment is Positive. The current price of 61.25 is above the 20-day moving average (MA) of 59.64, above the 50-day MA of 60.64, and above the 200-day MA of 58.59, indicating a bullish trend. The MACD of -0.29 indicates Negative momentum. The RSI at 56.81 is Neutral, neither overbought nor oversold. The STOCH value of 49.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KBH.

KB Home Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPH	73 Outperform	$3.04B	10.45	9.47%	―	-16.60%	-29.85%
MHO	71 Outperform	$3.63B	9.56	13.20%	―	4.77%	-9.30%
SKY	71 Outperform	$4.72B	22.26	13.69%	―	12.14%	48.68%
TMHC	71 Outperform	$6.39B	7.85	14.31%	―	6.98%	9.74%
KBH	66 Neutral	$3.87B	9.95	10.70%	1.76%	-10.01%	-27.81%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MTH	60 Neutral	$5.31B	11.88	8.76%	2.62%	-6.06%	-32.39%

KB Home Corporate Events

KB Home Sets 2025 Incentive Awards for Top Executives

On January 22, 2026, KB Home’s board of directors, through its management development and compensation committee, set the fiscal 2025 annual incentive awards for participants in the company’s incentive compensation program, including its named executive officers. The committee approved total annual incentive payouts of $2,826,839 for President and Chief Executive Officer Robert V. McGibney, $5,846,862 for Executive Chairman Jeffrey T. Mezger, $1,353,038 for executive Albert Z. Praw and $1,253,180 for executive Brian J. Woram, reflecting the board’s compensation decisions for senior leadership for the 2025 fiscal year.

The most recent analyst rating on (KBH) stock is a Hold with a $63.00 price target. To see the full list of analyst forecasts on KB Home stock, see the KBH Stock Forecast page.

KB Home announces upcoming board transition for 2026

On January 6, 2026, KB Home announced that director James C. Weaver had informed the company he would not seek re-election at its 2026 Annual Meeting of Stockholders and would serve out the remainder of his term until that meeting. The company said Weaver’s decision was not the result of any disagreement with KB Home or its board, indicating that the board transition is expected to be orderly and not driven by governance or strategic disputes.

The most recent analyst rating on (KBH) stock is a Buy with a $71.00 price target. To see the full list of analyst forecasts on KB Home stock, see the KBH Stock Forecast page.

KB Home Secures New $1.2 Billion Credit Line

On November 12, 2025, KB Home entered into a new revolving credit agreement with Bank of America, N.A., allowing for loans up to $1.2 billion, potentially increasing to $1.7 billion with additional commitments. This new facility replaces a previous agreement with Citibank, N.A., which had a commitment of up to $1.09 billion, and was terminated without penalties, reflecting KB Home’s ongoing financial management and strategic banking relationships.

The most recent analyst rating on (KBH) stock is a Buy with a $83.00 price target. To see the full list of analyst forecasts on KB Home stock, see the KBH Stock Forecast page.

KB Home Announces $1 Billion Share Repurchase

On October 27, 2025, KB Home announced a new $1 billion share repurchase authorization, replacing a prior one. This move underscores the company’s strategy of balanced capital allocation, emphasizing both growth investment and returning capital to shareholders. Since 2021, KB Home has repurchased over $1.5 billion in shares, highlighting its commitment to shareholder value and industry leadership in repurchasing market capitalization.

The most recent analyst rating on (KBH) stock is a Buy with a $83.00 price target. To see the full list of analyst forecasts on KB Home stock, see the KBH Stock Forecast page.