KB Home (KBH) AI Stock Analysis

• Market Cap: $3.82B
• Dividend Yield: 1.76%
• Average Volume (3M): 987.59K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.70
• 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: 785,612
• 30 Day Avg. Volume: 987,591
• 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: 1.38
• Enterprise Value/Revenue: 0.85
• Enterprise Value/Gross Profit: 4.48
• Enterprise Value/Ebitda: 8.90
• 1Y Price Target: $60.30
• Price Target Upside: -0.36% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11
• EPS Forecast (FY): 4.2
• Revenue Forecast (FY): $5.53B

• Rating: 70 Outperform
• Price Target: $70.00 ▲(15.66% Upside)
• Action: Upgraded Date: 02/13/26
• Date: Action: Upgraded 02/13/26

The score is driven primarily by solid but cooling financial performance (declining revenue and margin compression, with uneven cash flow) offset by favorable technical trend signals and an attractive valuation. Added liquidity from the new credit line is a modest positive support factor.

Positive Factors

Market position & product mix

KB Home’s scale and geographic mix across high-demand states (CA, TX, FL) and focus on customizable, energy-efficient homes provide durable demand diversification and pricing optionality. This supports steady order flow, repeatable revenue streams and competitive positioning over a multi-quarter horizon.

Liquidity and financing flexibility

The new, larger revolving credit line materially strengthens liquidity and reduces near-term refinancing risk, giving KB Home flexibility to fund land acquisitions, working capital swings, and community development. This structural buffer supports operations through housing-cycle variability.

Proven cash-generation in stronger cycles

KB Home’s track record of very strong operating and free cash flow in robust housing conditions demonstrates the business model’s capacity to self-fund growth, de-lever, and return capital. Even with cyclical swings, the company retains the structural ability to generate substantial cash when volumes recover.

Negative Factors

Declining revenue & margin compression

Recent downtrend in revenue and meaningful margin compression indicate reduced pricing power and/or higher build costs. Persisting margin pressure can erode return on invested capital, limit reinvestment capacity, and weaken long-term profitability if the housing backdrop remains soft.

Free cash flow volatility & cycle sensitivity

Material FCF volatility tied to working capital and the housing cycle complicates capital allocation and increases reliance on external liquidity during downturns. Episodic negative cash flow reduces the company’s margin for error and can force asset-sales, slower land buys, or higher borrowing in weak quarters.

Regulatory / industry antitrust risk

A potential DOJ probe into information-sharing or coordination within industry trade groups is a structural regulatory risk. It could lead to higher compliance costs, limits on cooperative practices around land/supply, and possible remedies that constrain how builders coordinate, raising execution risk long term.

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 clearly past a cyclical peak: 2025 revenue declined (-4.67%) and net margin compressed to ~6.9% from ~9.5% in 2024. Balance sheet appears reasonably supported by equity with moderate leverage, but cash flow is a swing factor—still positive recently, yet free cash flow fell in 2025 and has been historically volatile.

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	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 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: Negative
• Last Price: 60.52
• 50DMA: Positive
• 100DMA: Negative
• 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 60.52 is below the 20-day moving average (MA) of 63.18, above the 50-day MA of 60.38, and above the 200-day MA of 59.28, indicating a neutral trend. The MACD of 0.53 indicates Positive momentum. The RSI at 42.62 is Neutral, neither overbought nor oversold. The STOCH value of 20.91 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
TMHC	77 Outperform	$6.12B	8.18	12.87%	―	6.98%	9.74%
SKY	74 Outperform	$4.92B	23.75	13.69%	―	12.14%	48.68%
MHO	71 Outperform	$3.66B	9.67	13.20%	―	4.77%	-9.30%
KBH	70 Outperform	$3.82B	9.83	10.70%	1.76%	-10.01%	-27.81%
TPH	69 Neutral	$3.92B	17.06	7.25%	―	-16.60%	-29.85%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MTH	60 Neutral	$4.81B	11.35	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.