Options trading for KB Home (KBH, Financial) has surged to 3.1 times the usual volume ahead of the company's earnings announcement, with a significant inclination towards puts over calls at a 9:4 ratio. Current implied volatility indicates that the market expects a stock price movement close to 4.9%, or approximately $2.53, following the earnings report. Historically, the median price shift for KBH after earnings over the last eight quarters has been around 3.6%.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for KB Home (KBH, Financial) is $65.64 with a high estimate of $86.00 and a low estimate of $53.00. The average target implies an upside of 25.31% from the current price of $52.38. More detailed estimate data can be found on the KB Home (KBH) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, KB Home's (KBH, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for KB Home (KBH, Financial) in one year is $58.11, suggesting a upside of 10.94% from the current price of $52.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the KB Home (KBH) Summary page.
KBH Key Business Developments
Release Date: March 24, 2025
- Total Revenues: $1.4 billion for the first quarter of fiscal 2025.
- Diluted Earnings Per Share: $1.49 in the first quarter.
- Gross Margin: 20.3%, excluding inventory-related charges.
- Operating Income Margin: 9.3% for the first quarter.
- Book Value Per Share: Over $57, a 12% year-over-year increase.
- Net Orders: 2,772 net orders in the first quarter.
- Average Community Count: 257, up 7% year-over-year.
- Backlog: Over 4,400 homes valued at $2.2 billion.
- Homes Delivered: 2,770 homes, a 9% decrease year-over-year.
- Average Selling Price: $500,700 for the first quarter.
- Housing Gross Profit Margin: 20.2% for the first quarter.
- SG&A Expense Ratio: 11% for the first quarter.
- Net Income: $109.6 million for the first quarter.
- Land Investment: $920 million in land acquisition and development.
- Share Repurchases: $50 million in share repurchases during the quarter.
- Total Liquidity: $1.25 billion, including $268 million of cash.
- Debt-to-Capital Ratio: 30.5% at the end of the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- KB Home (KBH, Financial) reported a gross margin of 20.3%, which was above the midpoint of their guided range, despite lower deliveries.
- The company increased its book value per share to over $57, marking a 12% year-over-year increase.
- Net orders showed improvement in the last five weeks of the quarter, with a weekly average of about 300, equating to an absorption pace of 5.1 net orders per month per community.
- Build times improved to 147 days, the best level in the last four years, with some divisions already achieving the target of 120 days.
- KB Home (KBH) maintained a healthy balance sheet with a debt-to-capital ratio of 30.5% and significant financial flexibility, including $1.25 billion in total liquidity.
Negative Points
- The company lowered its revenue guidance for fiscal 2025 due to softer demand at the start of the spring selling season.
- Deliveries fell short of expectations by approximately 225 homes, impacting both revenues and net income.
- The average absorption pace per community decreased to 3.6 homes compared to 4.6 in the previous year's first quarter.
- Housing gross profit margin decreased to 20.2% from 21.5% in the prior year, mainly due to higher land costs and increased homebuyer concessions.
- The company experienced delays in Southern California deliveries due to utility service issues related to wildfires, affecting about 75 homes.
