In the latest close session, KB Home (KBH) was down 3.33% at $47.87. This change lagged the S&P 500's daily gain of 0.19%. On the other hand, the Dow registered a gain of 0.19%, and the technology-centric Nasdaq increased by 0.1%.
Coming into today, shares of the homebuilder had lost 4.03% in the past month. In that same time, the Construction sector gained 6.73%, while the S&P 500 gained 9.13%.
The upcoming earnings release of KB Home will be of great interest to investors. The company is expected to report EPS of $0.44, down 70.67% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.09 billion, down 28.72% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates project earnings of $3.1 per share and a revenue of $5.02 billion, demonstrating changes of -52.45% and -19.44%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for KB Home. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 5.06% downward. Right now, KB Home possesses a Zacks Rank of #5 (Strong Sell).
From a valuation perspective, KB Home is currently exchanging hands at a Forward P/E ratio of 16. This expresses a premium compared to the average Forward P/E of 14.15 of its industry.
One should further note that KBH currently holds a PEG ratio of 8.74. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Building Products - Home Builders industry stood at 1.5 at the close of the market yesterday.
The Building Products - Home Builders industry is part of the Construction sector. With its current Zacks Industry Rank of 227, this industry ranks in the bottom 7% of all industries, numbering over 250.
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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).