In the latest trading session, KB Home (KBH) closed at $47.05, marking a +1.86% move from the previous day. The stock exceeded the S&P 500, which registered a loss of 0.52% for the day. Meanwhile, the Dow experienced a drop of 1.24%, and the technology-dominated Nasdaq saw a decrease of 0.21%.
The homebuilder's shares have seen a decrease of 3.06% over the last month, surpassing the Construction sector's loss of 6.53% and falling behind the S&P 500's loss of 1.21%.
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 $1.21, marking a 36.98% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.53 billion, indicating a 9.81% decrease compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $3.26 per share and revenue of $5.02 billion, which would represent changes of -50% and -19.55%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for KB Home. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.31% higher. KB Home presently features a Zacks Rank of #3 (Hold).
In terms of valuation, KB Home is currently trading at a Forward P/E ratio of 14.17. This represents a premium compared to its industry average Forward P/E of 13.01.
We can also see that KBH currently has a PEG ratio of 2.4. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Home Builders was holding an average PEG ratio of 2.35 at yesterday's closing price.
The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 234, which puts it in the bottom 5% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).