KB Home (KBH, Financial) is keen on delivering a healthier in-home environment. The innovative Double ZeroHouse comprises of features like superior filtration and air ventilation systems coupled with an air particle monitoring system for measuring airborne allergens.
In October, KB Home is launched its newest and highly sophisticated Double ZeroHouse in Sacramento. KB Home has introduced the newest and the best technologies in the market through leveraging its established partnerships with key national suppliers for delivering the home of the future.
A closer look at the concept
The Double ZeroHouse is highly sustainable, with nearly no usage of both outdoor and energy. It is equipped with a unique solar panel and battery technology for harnessing and storing enough solar energy to enable the complete household's energy requirements for both day and night. Moreover, it does not require freshwater for landscaping using its greywater system to recycle water used inside the home for outside irrigation, reducing the water usage by approximately 40,000 gallons of water yearly for a family having four members.
KB Home is leading the homebuilding industry considering the environmental friendliness by lowering the resources usage through the successful implementation of recycling towards innovative technology and value engineering for increasing the operating efficiency of homes.
The consumer confidence looks positive and is rising continuously with the current level being the highest level since fiscal year 2007. Interest rates are low and continue to accelerate the consumer confidence regarding home affordability.
New communities
In the quarter, KB Home successfully introduced eight innovative communities in Las Vegas, having three of the newly launched communities at Inspirada.
KB Home plans to open two key parts of Inspirada in October, featuring basketball and tennis courts, picnic areas, splash parks and soccer fields.
In the last two years, KB Home has signed a marketing contract with Nationstar with improvement in the backlog stability and closings predictability but still not according to the expectations primarily due to only a 50% to 60% capture rate with Nationstar.
Conclusion
The trailing P/E and forward P/E ratios of 16.26 and 11.34 respectively represent successful cost-cutting efforts of the company. Also, it’s better than the industry’s average P/E of 16.98, going forward. The PEG ratio of 0.61, below 1 signifies considerable growth and healthier than the industry’s average of 0.84. The profit margin of 4.21% is satisfactory. The revenue per share and diluted EPS of 25.49 and 0.96 respectively depicts poor investor earnings.
The quarterly revenue growth and quarterly earnings growth of 7.30% and 4.00% respectively is nominal. The current ratio of 7.16 suggests the robustness of the company’s balance sheet. Finally, the investors are advised to invest into KB Home looking at the solid long-term growth prospects indicated by the CAGR for the next 5 years per annum of 20.53% comparable to the industry’s average of 18.59% and expect promising returns in a long run.
