KB Home (KBH) AI Stock Analysis

• Market Cap: $3.76B
• Dividend Yield: 1.63%
• Average Volume (3M): 1.43M
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.89
• 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: 1,214,474
• 30 Day Avg. Volume: 1,429,885
• 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: 1.58
• Enterprise Value/Revenue: 0.91
• Enterprise Value/Gross Profit: 4.56
• Enterprise Value/Ebitda: 8.62
• 1Y Price Target: $64.63
• Price Target Upside: 5.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 69 Neutral
• Price Target: $63.00 ▲(2.82% Upside)

KB Home's overall stock score is driven by its solid financial performance and attractive valuation, despite technical indicators showing bearish momentum. The earnings call highlights strong operational achievements and strategic focus, but challenges in order declines and regional pressures weigh on the outlook. The stock's low P/E ratio and reasonable dividend yield enhance its appeal, but market-specific challenges and declining backlog are concerns.

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 (KBH) is a leading homebuilding company based in the United States, primarily focused on the design and construction of residential homes. Established in 1957, the company operates in various segments including single-family detached homes, townhomes, and condominiums. KB Home is recognized for its commitment to energy-efficient construction and offers customizable home designs to meet the diverse needs of its customers. The company primarily serves markets in the Western, Southern, and Central regions of the United States.

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: Neutral
• Last Price: 61.27
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KBH, the sentiment is Neutral. The current price of 61.27 is below the 20-day moving average (MA) of 62.50, below the 50-day MA of 62.96, and above the 200-day MA of 58.99, indicating a neutral trend. The MACD of -1.05 indicates Positive momentum. The RSI at 46.90 is Neutral, neither overbought nor oversold. The STOCH value of 20.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KBH.

KB Home Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPH	76 Outperform	$2.71B	7.87	11.38%	―	-3.59%	-10.82%
SKY	74 Outperform	$3.76B	18.12	14.39%	―	16.87%	54.47%
MHO	70 Outperform	$3.42B	7.44	17.56%	―	7.39%	-1.37%
TMHC	70 Outperform	$5.99B	7.27	15.59%	―	13.77%	28.57%
KBH	69 Neutral	$3.76B	8.14	13.04%	1.63%	-0.95%	-9.22%
MTH	68 Neutral	$4.75B	7.62	12.58%	2.49%	-3.72%	-23.00%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

KB Home Corporate Events

KB Home Boosts Executive Salaries Amid Talent Retention

On July 10, 2025, KB Home‘s board of directors approved increases to the base salaries of certain executive officers, effective July 1, 2025. This decision reflects the company’s commitment to retaining top talent and may impact its operational costs and compensation structure.