In the latest close session, KB Home (KBH) was up +1.84% at $57.56. The stock outperformed the S&P 500, which registered a daily loss of 0.32%. At the same time, the Dow lost 0.34%, and the tech-heavy Nasdaq lost 0.6%.
Coming into today, shares of the homebuilder had gained 3.12% in the past month. In that same time, the Construction sector lost 1.42%, while the S&P 500 gained 2.46%.
The investment community will be paying close attention to the earnings performance of KB Home in its upcoming release. The company is forecasted to report an EPS of $0.88, showcasing a 45.34% downward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.29 billion, down 20.14% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $3.3 per share and revenue of $5.09 billion, which would represent changes of -49.39% and -18.37%, respectively, from the prior year.
Any recent changes to analyst estimates for KB Home should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.22% higher. At present, KB Home boasts a Zacks Rank of #3 (Hold).
In the context of valuation, KB Home is at present trading with a Forward P/E ratio of 17.15. For comparison, its industry has an average Forward P/E of 14.47, which means KB Home is trading at a premium to the group.
Meanwhile, KBH's PEG ratio is currently 9.37. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Building Products - Home Builders industry had an average PEG ratio of 2.87.
The Building Products - Home Builders industry is part of the Construction sector. With its current Zacks Industry Rank of 205, this industry ranks in the bottom 17% of all industries, numbering over 250.
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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).