KB Home posted second quarter earnings that surpassed analysts’ expectations.
The homebuilding company’s earnings for the quarter came in at $2.32 a share, handily topping the $2.04 expected by analysts polled by FactSet. Earnings per share were +55% higher than the year-ago quarter.
Revenue rose +19% from the year-ago quarter to $1.72 billion, also exceeded consensus expectations of $1.65 billion (based on FactSet poll).
While the number of homes delivered of 3,469 units was flat compared to the year-ago quarter, the average selling price rose +21% to $494,300.
Net orders fell -9% from the prior-year quarter to 3,914 homes. However, the value of net orders climbed +4% to $2.12 billion.
The company’s housing gross margin widened by +390 basis points (bps) year over year to 25.3%, on the back of strength in pricing due to strong housing demand couple with limited supply of available homes for sale and the lower amortization of previously-capitalized interest. This was partially offset by increased construction costs and higher expenses made towards current operations and expected growth.
Looking ahead, the company now projects housing revenues in the range of $7.30-$7.50 billion for fiscal 2022, narrower than the previous forecast range of $7.20-$7.60 billion. It expects average selling price of homes to be $500,000. Homebuilding operating margin (assuming no inventory-related charges) is predicted to improve 16-16.6%.
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 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 Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 58 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 324 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Momentum Indicator moved below the 0 level on April 03, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on KBH as a result. In of 92 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
KBH moved below its 50-day moving average on April 10, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for KBH crossed bearishly below the 50-day moving average on April 16, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
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 April 23, 2024. 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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding 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 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 53, 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 (6.594). P/E Ratio (9.519) is within average values for comparable stocks, (94.223). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.437). Dividend Yield (0.011) settles around the average of (0.043) among similar stocks. P/S Ratio (0.876) is also within normal values, averaging (80.487).
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 Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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
Industry Homebuilding