KB Home (KBH) AI Stock Analysis

• Market Cap: $4.08B
• Dividend Yield: 1.59%
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.90
• Revenue Growth: -0.95%
• EPS Growth: -9.22%
• Country: US
• Employees: 2,384
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 1.61
• Shares Outstanding: 64,764,690
• 10 Day Avg. Volume: 1,130,552
• 30 Day Avg. Volume: 1,435,487
• PEG Ratio: 0.47
• Price to Book (P/B): 1.52
• Price to Sales (P/S): 0.89
• P/FCF Ratio: 19.12
• Enterprise Value/Market Cap: 1.45
• Enterprise Value/Revenue: 0.91
• Enterprise Value/Gross Profit: 4.56
• Enterprise Value/Ebitda: 8.62
• 1Y Price Target: $64.63
• Price Target Upside: 2.54% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 74 Outperform
• Price Target: $69.00 ▲(9.47% Upside)

KB Home's overall stock score is driven by its solid financial performance and attractive valuation, despite challenges in revenue growth and regional market pressures. The earnings call provided a positive outlook with strategic focus on operational efficiencies and shareholder returns. Technical indicators suggest a neutral to slightly bearish short-term outlook, but the stock's low P/E ratio and dividend yield enhance its attractiveness.

Positive Factors

Operational Achievements

Reducing build times and costs enhances operational efficiency, allowing KB Home to deliver projects faster and at lower costs, which can improve margins and customer satisfaction over the long term.

Cash Flow Improvement

Strong cash flow growth indicates robust cash generation capabilities, providing KB Home with greater financial flexibility to invest in growth opportunities and manage debt effectively.

Community Openings and Growth

Expanding community openings positions KB Home for future revenue growth by increasing its market presence and potential customer base, supporting long-term business expansion.

Negative Factors

Order and Backlog Decline

Declining orders and backlog suggest potential future revenue challenges, as a reduced backlog can lead to lower future sales and impact long-term growth prospects.

Challenges with Built-to-Order Homes

A lower mix of built-to-order homes can impact profitability, as these typically generate higher margins. This shift may affect KB Home's ability to maintain historical margin levels.

Market-Specific Challenges

Regional market challenges can limit sales growth and profitability in affected areas, potentially impacting overall company performance if these issues persist.

KB Home Business Overview & Revenue Model

Company Description

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also offers financial services, such as insurance products and title services. It has operations in Arizona, California, Colorado, Florida, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California.

How the Company Makes Money

KB Home generates revenue through the sale of newly constructed homes, which is its primary revenue stream. The company offers a range of home types and price points, allowing it to cater to different market segments. Additionally, KB Home earns money from land sales and the sale of homes in joint ventures. The company also benefits from its direct relationships with customers, enabling it to offer personalized home design features, which can command higher prices. Significant partnerships with suppliers and subcontractors help KB Home manage construction costs and maintain quality, further contributing to its profitability. Economic factors, such as housing demand, interest rates, and market conditions, also play a crucial role in influencing its earnings.

KB Home Financial Statement Overview

Summary

KB Home shows strong profitability with a robust gross profit margin and healthy net profit margin. The balance sheet is stable with a good equity ratio and manageable debt levels. However, the significant decline in cash flow and negative revenue growth are concerning, indicating potential liquidity risks and future growth challenges.

Income Statement

KB Home's income statement shows a robust gross profit margin of 20.5% in TTM, reflecting strong operational efficiency. The net profit margin stands at 8.5%, indicating healthy profitability. However, revenue growth has been slightly negative at -3.7% over the last year, raising concerns about future growth potential. EBIT and EBITDA margins are solid at 10.1% and 9.8%, respectively, underscoring efficient cost management.

Balance Sheet

The balance sheet is strong with an equity ratio of 56.9%, suggesting a stable financial structure. The debt-to-equity ratio is manageable at 0.47, indicating a prudent use of debt. Return on equity is healthy at 14.2%, showcasing the company's ability to generate returns on shareholder investments. However, slight increases in debt levels warrant caution.

Cash Flow

Cash flow analysis reveals challenges with a significant decrease in free cash flow by 80% over the year, marking potential liquidity risks. The operating cash flow to net income ratio is low at 0.19, suggesting weaker cash generation relative to reported earnings. Nonetheless, free cash flow to net income remains positive at 0.11, indicating some level of cash return from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.54B	6.93B	6.41B	6.90B	5.72B	4.18B
Gross Profit	1.30B	1.48B	1.37B	1.69B	1.26B	802.72M
EBITDA	688.84M	888.19M	778.95M	1.10B	723.99M	392.44M
Net Income	517.87M	655.02M	590.18M	816.67M	564.75M	296.24M
Balance Sheet
Total Assets	6.99B	6.94B	6.65B	6.65B	5.84B	5.36B
Cash, Cash Equivalents and Short-Term Investments	330.59M	599.19M	727.34M	330.20M	290.76M	681.19M
Total Debt	1.94B	1.71B	1.72B	1.87B	1.71B	1.78B
Total Liabilities	2.31B	2.88B	2.84B	2.99B	2.82B	2.69B
Stockholders Equity	4.68B	4.06B	3.81B	3.66B	3.02B	2.67B
Cash Flow
Free Cash Flow	349.79M	323.41M	1.05B	138.18M	-76.69M	281.84M
Operating Cash Flow	394.48M	362.72M	1.08B	183.42M	-37.30M	310.68M
Investing Cash Flow	-54.22M	-50.12M	-58.06M	-71.77M	-38.08M	-26.56M
Financing Cash Flow	-383.66M	-440.75M	-627.49M	-73.58M	-315.01M	-56.44M

KB Home Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 63.03
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KBH, the sentiment is Positive. The current price of 63.03 is above the 20-day moving average (MA) of 62.11, below the 50-day MA of 63.29, and above the 200-day MA of 58.90, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 53.14 is Neutral, neither overbought nor oversold. The STOCH value of 83.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KBH.

KB Home Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KBH	―	$4.08B	8.84	13.04%	1.59%	-0.95%	-9.22%
SKY	―	$4.32B	20.35	14.39%	―	16.87%	54.47%
TPH	―	$2.85B	9.78	9.47%	―	-16.60%	-29.85%
MTH	―	$5.08B	8.15	12.58%	2.33%	-3.72%	-23.00%
TMHC	―	$5.90B	7.26	14.31%	―	6.98%	9.74%
MHO	―	$3.43B	7.62	15.76%	―	4.77%	-9.30%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

KB Home Corporate Events

KB Home Approves Long-Term Incentive Awards for Executives

On October 9, 2025, KB Home‘s board of directors approved long-term incentive awards for its named executive officers under the Amended and Restated KB Home 2014 Equity Incentive Plan. These awards, consisting of performance-based restricted stock units (PSUs), are contingent on achieving specific financial performance metrics over a three-year period starting December 1, 2025. The performance metrics include cumulative adjusted earnings per share, average adjusted return on invested capital, and revenue growth relative to peers. The awards are designed to align executive compensation with company performance, but if performance thresholds are not met, recipients will not receive shares or cash dividends.

The most recent analyst rating on (KBH) stock is a Sell with a $60.00 price target. To see the full list of analyst forecasts on KB Home stock, see the KBH Stock Forecast page.

KB Home’s Earnings Call: Strong Performance Amid Challenges

The recent earnings call for KB Home paints a picture of robust financial health, underscored by strong revenue and earnings figures. Despite facing challenges such as order declines and regional market pressures, the company remains optimistic, focusing on share repurchases and operational efficiencies to navigate these hurdles effectively.

KB Home Reports Q3 2025 Earnings and Strategic Outlook

KB Home is a prominent homebuilder in the United States, known for its customer-focused approach and commitment to sustainability, offering personalized, energy-efficient homes across 49 markets.