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 may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 38 cases where KBH's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 55 cases where KBH's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where KBH advanced for three days, in of 308 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 281 cases where KBH Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The 10-day RSI Indicator for KBH moved out of overbought territory on May 19, 2023. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 29 similar instances where the indicator moved out of overbought territory. In of the 29 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on May 22, 2023. 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 Moving Average Convergence Divergence Histogram (MACD) for KBH turned negative on May 19, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 53 similar instances when the indicator turned negative. In of the 53 cases the stock turned lower in the days that followed. This puts the odds of success at .
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 Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued 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 (1.020) is normal, around the industry mean (6.761). P/E Ratio (5.035) is within average values for comparable stocks, (120.868). KBH's Projected Growth (PEG Ratio) (0.000) is slightly lower than the industry average of (2.346). KBH has a moderately low Dividend Yield (0.013) as compared to the industry average of (0.048). P/S Ratio (0.584) is also within normal values, averaging (71.817).
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 65, placing this stock better than average.
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 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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to 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.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a constructor and seller single family homes as well as condominium complexes
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A.I.dvisor indicates that over the last year, KBH has been closely correlated with MTH. These tickers have moved in lockstep 90% of the time. This A.I.-generated data suggests there is a high statistical probability that if KBH jumps, then MTH could also see price increases.