KB Home (KBH) Stock Falls Amid Market Uptick: What Investors Need to Know

Investors will be eagerly watching for the performance of KB Home in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.88, marking a 45.34% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.29 billion, indicating a 20.14% decrease compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.3 per share and a revenue of $5.09 billion, representing changes of -49.39% and -18.37%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KB Home. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.5% higher. Currently, KB Home is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, KB Home is currently trading at a Forward P/E ratio of 17.31. This signifies a premium in comparison to the average Forward P/E of 14.31 for its industry.

Meanwhile, KBH's PEG ratio is currently 9.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Building Products - Home Builders stocks are, on average, holding a PEG ratio of 2.84 based on yesterday's closing prices.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 170, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KBH in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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