In the latest close session, KB Home (KBH) was down 1.54% at $63.75. The stock trailed the S&P 500, which registered a daily loss of 0.43%. At the same time, the Dow lost 0.77%, and the tech-heavy Nasdaq lost 0.22%.
The stock of homebuilder has risen by 13.88% in the past month, leading the Construction sector’s gain of 5.79% and the S&P 500’s gain of 2.65%.
Market participants will be closely following the financial results of KB Home in its upcoming release. The company's earnings per share (EPS) are projected to be $1.56, reflecting a 23.53% decrease from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.61 billion, down 8.05% from the prior-year quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.55 per share and revenue of $6.41 billion, indicating changes of -22.49% and -7.52%, respectively, compared to the previous year.
Any recent changes to analyst estimates for KB Home should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, KB Home possesses a Zacks Rank of #5 (Strong Sell).
In the context of valuation, KB Home is at present trading with a Forward P/E ratio of 9.89. This denotes a discount relative to the industry average Forward P/E of 12.09.
We can also see that KBH currently has a PEG ratio of 5.2. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Building Products - Home Builders industry had an average PEG ratio of 2.63.
The Building Products - Home Builders industry is part of the Construction sector. Currently, this industry holds a Zacks Industry Rank of 231, positioning it in the bottom 7% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
