KB Home (KBH) AI Stock Analysis

• Market Cap: $3.87B
• Dividend Yield: 1.76%
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.90
• Revenue Growth: 3.65%
• EPS Growth: -0.61%
• Country: US
• Employees: 2,384
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Residential Construction
• EPS (TTM): 1.50
• Shares Outstanding: 68,050,186
• 10 Day Avg. Volume: 1,770,357
• 30 Day Avg. Volume: 1,814,559
• PEG Ratio: -0.91
• Price to Book (P/B): 1.05
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 62.20
• Enterprise Value/Market Cap: 1.45
• Enterprise Value/Revenue: 0.21
• Enterprise Value/Gross Profit: 4.10
• Enterprise Value/Ebitda: 1.73
• 1Y Price Target: $59.45
• Price Target Upside: 4.56% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 73 Outperform
• Price Target: $66.00 ▲(16.07%Upside)

KB Home's stock is positioned moderately well due to a strong valuation and favorable technical indicators. While the company's financial performance is solid, concerns about revenue growth and cash flow generation are notable. The mixed sentiment from the earnings call reflects both achievements and challenges, impacting the overall score.

Positive Factors

Construction Costs

Homebuilding gross margin percentage at 19.7% topped the guide, indicating favorable construction costs.

Pricing Strategy

Sales trends have rebounded to 1+/week/store after KBH cut base prices.

Share Repurchase

KBH has increased its share repurchase guidance, indicating a focus on returning value to shareholders.

Negative Factors

Operating Backdrop

The outlook could be tricky, with a freshly lower guide implying a sharp step-up in FQ4 backlog conversion, but not a slam dunk in a tough operating backdrop.

Order Performance

Orders at 3,460 missed expectations, suggesting a lagging pace compared to earlier quarter momentum.

Revenue Outlook

KBH lowered its full year guidance to reflect a weaker revenue and margin outlook, which was partially offset by more share repurchases.

KB Home Business Overview & Revenue Model

Company Description

KB Home (KBH) is one of the largest and most recognized homebuilding companies in the United States. Founded in 1957 and headquartered in Los Angeles, California, KB Home specializes in building a variety of new homes designed primarily for first-time and move-up homebuyers. The company operates in several key markets across the country, including California, Texas, Arizona, and Nevada. KB Home is known for its distinctive Built to Order™ approach, which allows homebuyers to customize their homes according to their preferences and budgets.

How the Company Makes Money

KB Home generates revenue primarily through the design, construction, and sale of single-family homes. The company's revenue model is centered around its core business of homebuilding, where it acquires land, develops residential communities, and sells completed homes to buyers. A significant portion of KB Home's earnings comes from the sale of these homes, with additional revenue streams from financial services related to home sales, such as mortgage banking services provided through partnerships with third-party mortgage companies. The company's strategic focus on energy-efficient and customizable homes adds value and appeal to potential buyers. Additionally, KB Home's partnerships with material suppliers and subcontractors help manage costs and maintain profitability.

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

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.93B	6.41B	6.90B	5.72B	4.18B
Gross Profit	1.47B	1.37B	1.69B	1.26B	802.72M
EBITDA	822.89M	778.95M	1.10B	723.99M	392.44M
Net Income	655.02M	590.18M	816.67M	564.75M	296.24M
Balance Sheet
Total Assets	6.94B	6.65B	6.65B	5.84B	5.36B
Cash, Cash Equivalents and Short-Term Investments	599.19M	727.34M	330.20M	290.76M	681.19M
Total Debt	1.71B	1.72B	1.87B	1.71B	1.78B
Total Liabilities	2.88B	2.84B	2.99B	2.82B	2.69B
Stockholders Equity	4.06B	3.81B	3.66B	3.02B	2.67B
Cash Flow
Free Cash Flow	323.41M	1.05B	138.18M	-76.69M	281.84M
Operating Cash Flow	362.72M	1.08B	183.42M	-37.30M	310.68M
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 Price: 56.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 56.86 is above the 20-day moving average (MA) of 55.17, above the 50-day MA of 53.59, and below the 200-day MA of 63.43, indicating a neutral trend. The MACD of 1.00 indicates Negative momentum. The RSI at 56.11 is Neutral, neither overbought nor oversold. The STOCH value of 65.28 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	81 Outperform	$2.76B	8.05	11.38%	―	-3.59%	-10.82%
GRBK	79 Outperform	$2.91B	7.98	24.29%	―	21.22%	24.90%
MHO	78 Outperform	$3.27B	6.71	17.56%	―	7.39%	-1.37%
SKY	74 Outperform	$3.73B	19.04	13.38%	―	22.65%	34.77%
KBH	73 Outperform	$3.87B	7.53	14.07%	1.76%	3.65%	-0.61%
MTH	72 Outperform	$5.01B	7.96	12.58%	2.31%	-3.72%	-23.00%
Sector *	62 Neutral	C$5.28B	8.27	20.23%	3.15%	3.09%	8.49%

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.

The most recent analyst rating on (KBH) stock is a Hold with a $86.00 price target. To see the full list of analyst forecasts on KB Home stock, see the KBH Stock Forecast page.