tiprankstipranks
Trending News
More News >
KB Home (KBH)
NYSE:KBH
Advertisement

KB Home (KBH) AI Stock Analysis

Compare
1,019 Followers

Top Page

KBH

KB Home

(NYSE:KBH)

Rating:73Outperform
Price Target:
$69.00
▲(1.52% Upside)
KB Home's overall stock score reflects a solid financial foundation and positive technical momentum. The attractive valuation adds to its appeal, though concerns about cash flow and revised guidance due to market challenges temper the outlook. Effective management of these risks will be crucial for future performance.
Positive Factors
Construction Costs
Homebuilding gross margin percentage at 19.7% topped the guide, indicating favorable construction costs.
Land Investment
KBH grew its land position for the fourth consecutive quarter, indicating a strategic investment in future growth.
Share Repurchase
KBH has increased its share repurchase guidance, indicating a focus on returning value to shareholders.
Negative Factors
Gross Margin
Management expects a lower gross margin in the third quarter due to lower deliveries and regional mix.
Order Decline
Net orders of 3.5K were down 13% YoY and 9% below the forecast.
Revenue Guidance
KBH lowered its revenue guidance to $6.3-$6.5bn, reflecting weaker revenue expectations.

KB Home (KBH) vs. SPDR S&P 500 ETF (SPY)

KB Home Business Overview & Revenue Model

Company DescriptionKB Home (KBH) is a leading homebuilding company based in the United States, primarily focused on the design and construction of residential homes. Established in 1957, the company operates in various segments including single-family detached homes, townhomes, and condominiums. KB Home is recognized for its commitment to energy-efficient construction and offers customizable home designs to meet the diverse needs of its customers. The company primarily serves markets in the Western, Southern, and Central regions of the United States.
How the Company Makes MoneyKB 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 Key Performance Indicators (KPIs)

Any
Any
EBT by Geography
EBT by Geography
Chart Insights
Data provided by:Main Street Data

KB Home Earnings Call Summary

Earnings Call Date:Jun 23, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Sep 17, 2025
Earnings Call Sentiment Neutral
While KB Home demonstrated strong financial management, improved build times, and customer satisfaction, the company faced significant market challenges, leading to a downward revision in guidance and lower net orders. The highlights and lowlights are relatively balanced.
Q2-2025 Updates
Positive Updates
Strong Financial Position and Shareholder Returns
KB Home maintained a healthy balance sheet and repurchased $200 million of shares in the second quarter, indicating robust financial flexibility and commitment to returning value to shareholders.
Improved Build Times
The company achieved faster build times, improving sequentially by 7 days and returning to pre-pandemic levels, which contributed to exceeding delivery expectations.
High Customer Satisfaction
KB Home received a record number of division-level customer satisfaction honors from AvidCX, reflecting strong customer service and satisfaction.
Reduction in Direct Costs
Direct costs were reduced by 3.2% year-over-year, contributing to better-than-expected financial performance in a challenging market environment.
Increased Book Value Per Share
The company increased its book value per share to nearly $59, a 10% year-over-year increase.
Negative Updates
Revised 2025 Guidance Downward
Due to softer market conditions and lower-than-expected net orders, KB Home revised its fiscal 2025 revenue expectation to a range of $6.3 billion to $6.5 billion.
Subdued Demand and Market Challenges
Factors such as elevated mortgage interest rates, macroeconomic uncertainty, and geopolitical tensions led to a more subdued demand during the spring selling season.
Lower Net Orders
Net orders declined in April and May, with a monthly absorption pace per community dropping to 4.5 net orders compared to 5.5 in the previous year's second quarter.
Pricing Pressure and Margin Reduction
The company faced pricing pressure due to regional mix and reduced operating leverage, leading to a decrease in adjusted housing gross profit margin.
Company Guidance
During the KB Home 2025 Second Quarter Earnings Conference Call, the company provided comprehensive guidance and results for the fiscal year 2025. Key financial metrics included total revenues of $1.5 billion, with a diluted earnings per share of $1.50. The company achieved a gross margin of 19.7%, exceeding guidance expectations, while SG&A expenses were at the lower end of the guided range at 10.7%, contributing to an operating income margin of 9%. The CEO, Jeff Mezger, highlighted a strategic shift towards optimizing asset management, aiming for an annual average absorption pace of 5 net orders per month per community in stronger markets, and 4 net orders in slower conditions. The company revised its revenue guidance for fiscal 2025 to between $6.3 billion and $6.5 billion, adjusting for softer market conditions and aiming for approximately 13,200 deliveries. Additionally, KB Home repurchased $200 million of shares in the second quarter and plans to repurchase between $100 million and $200 million in the third quarter, reflecting a commitment to return cash to shareholders amidst a challenging market environment.

KB Home Financial Statement Overview

Summary
KB Home has a solid financial position with strong profitability and a stable balance sheet. The gross profit margin is robust at 20.5%, and the net profit margin is healthy at 8.5%. However, challenges include a slight decline in revenue growth (-3.7%) and significant decreases in cash flow, particularly free cash flow down by 80%.
Income Statement
75
Positive
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
70
Positive
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
60
Neutral
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue6.93B6.41B6.90B5.72B4.18B
Gross Profit1.47B1.37B1.69B1.26B802.72M
EBITDA822.89M778.95M1.10B723.99M392.44M
Net Income655.02M590.18M816.67M564.75M296.24M
Balance Sheet
Total Assets6.94B6.65B6.65B5.84B5.36B
Cash, Cash Equivalents and Short-Term Investments599.19M727.34M330.20M290.76M681.19M
Total Debt1.71B1.72B1.87B1.71B1.78B
Total Liabilities2.88B2.84B2.99B2.82B2.69B
Stockholders Equity4.06B3.81B3.66B3.02B2.67B
Cash Flow
Free Cash Flow323.41M1.05B138.18M-76.69M281.84M
Operating Cash Flow362.72M1.08B183.42M-37.30M310.68M
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
Positive
Last Price67.97
Price Trends
50DMA
58.48
Positive
100DMA
55.54
Positive
200DMA
60.56
Positive
Market Momentum
MACD
2.03
Negative
RSI
70.42
Negative
STOCH
84.90
Negative
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 67.97 is above the 20-day moving average (MA) of 62.95, above the 50-day MA of 58.48, and above the 200-day MA of 60.56, indicating a bullish trend. The MACD of 2.03 indicates Negative momentum. The RSI at 70.42 is Negative, neither overbought nor oversold. The STOCH value of 84.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KBH.

KB Home Risk Analysis

KB Home disclosed 10 risk factors in its most recent earnings report. KB Home reported the most risks in the "Production" 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$4.14B8.6117.56%7.39%-1.37%
79
Outperform
$3.25B9.4611.38%-3.59%-10.82%
76
Outperform
$5.89B9.4512.58%1.94%-3.72%-23.00%
76
Outperform
$7.10B8.2915.59%13.77%28.57%
74
Outperform
$4.43B20.8714.39%16.87%54.47%
73
Outperform
$4.63B9.0014.07%1.47%3.65%-0.61%
61
Neutral
$17.92B12.81-3.11%2.97%1.30%-14.28%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KBH
KB Home
67.97
-10.81
-13.72%
MHO
M/I Homes
156.91
1.32
0.85%
MTH
Meritage
82.83
-10.08
-10.85%
SKY
Champion Homes
78.40
-8.90
-10.19%
TPH
Tri Pointe
37.14
-4.86
-11.57%
TMHC
Taylor Morrison
71.84
7.80
12.18%

KB Home Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
KB Home Boosts Executive Salaries Amid Talent Retention
Neutral
Jul 15, 2025

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.

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.Date of analysis: Aug 19, 2025