KB Home (KBH, $27.21) tops Q3 earnings estimates
KB Home reported third quarter adjusted earnings of $2.86 per share, which surpassed the consensus estimate of $2.69 (according to Zacks Equity Research). The figure implies a +79% surge from than the year-ago quarter, on the back of solid revenues and margin growth.
Revenues for the quarter climbed +26% from the year-ago quarter to $1.845 billion, missing the consensus estimate of $1.86 billion.
The homebuilding segment’s revenues increased +25.8% year-over-year to $1.84 billion. The number of homes delivered rose +5.5% from the year-ago quarter to 3,615 units, while the average selling price climbed +19% to $508,700. Net orders fell -50.1% year-over-year to 2,040 homes, amidst lower demand due to higher mortgage rates, inflation, and other macroeconomic and geopolitical challenges.
Revenues from the Financial Services segment were up +15.4% year over year to $6 million. Pretax income was down -51.1% from a year ago, reflecting a significant decline in the equity in income of its mortgage banking joint venture, KBHS Home Loans, LLC.
For the fiscal fourth quarter, KB Home expects housing revenues in the range of $1.95-$2.05 billion, vs. $1.67 billion in the year-ago quarter. The company predicts Average Selling Price to be $503,000, and expects homebuilding operating margin (assuming no inventory-related charges) to be around 16.7% (vs. the year ago figure of 12.9%).
KB Home expects housing gross margin (assuming no inventory-related charges) in the range of 25-26%, compared to 22.4% reported a year ago.
KBH's Stochastic Oscillator descends into oversold zone
The Stochastic Oscillator for KBH moved into oversold territory on February 03, 2025. Be on the watch for the price uptrend or consolidation in the future. At that time, consider buying the stock or exploring call options.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where KBH's RSI Oscillator exited the oversold zone, of 15 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for KBH just turned positive on January 07, 2025. Looking at past instances where KBH's MACD turned positive, the stock continued to rise in of 51 cases over the following month. The odds of a continued upward trend are .
KBH may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on January 31, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on KBH as a result. In of 93 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The 50-day moving average for KBH moved below the 200-day moving average on January 13, 2025. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KBH declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for KBH entered a downward trend on January 23, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 63, placing this stock better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.366) is normal, around the industry mean (7.196). P/E Ratio (9.519) is within average values for comparable stocks, (103.177). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.437). Dividend Yield (0.011) settles around the average of (0.044) among similar stocks. P/S Ratio (0.876) is also within normal values, averaging (88.859).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. KBH’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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General Information
a constructor and seller single family homes as well as condominium complexes
Industry Homebuilding