KB Home (KBH) closed at $52.06 in the latest trading session, marking a +1.76% move from the prior day. The stock's performance was ahead of the S&P 500's daily gain of 0.41%. Elsewhere, the Dow gained 1.73%, while the tech-heavy Nasdaq lost 0.09%.
Heading into today, shares of the homebuilder had gained 3% over the past month, outpacing the Construction sector's loss of 0.86% and lagging the S&P 500's gain of 4.59%.
The investment community will be paying close attention to the earnings performance of KB Home in its upcoming release. It is anticipated that the company will report an EPS of $0.44, marking a 70.67% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $1.09 billion, reflecting a 28.72% fall from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.1 per share and revenue of $5.02 billion. These totals would mark changes of -52.45% and -19.44%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for KB Home. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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, there's been no change in the Zacks Consensus EPS estimate. Currently, KB Home is carrying a Zacks Rank of #4 (Sell).
From a valuation perspective, KB Home is currently exchanging hands at a Forward P/E ratio of 16.53. This indicates a premium in contrast to its industry's Forward P/E of 13.73.
It is also worth noting that KBH currently has a PEG ratio of 9.03. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Building Products - Home Builders industry had an average PEG ratio of 1.84.
The Building Products - Home Builders industry is part of the Construction sector. This industry, currently bearing a Zacks Industry Rank of 213, finds itself in the bottom 13% echelons of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).