In the latest close session, KB Home (KBH) was down 3.95% at $52.30. The stock fell short of the S&P 500, which registered a loss of 0.04% for the day. Meanwhile, the Dow experienced a drop of 0.57%, and the technology-dominated Nasdaq saw an increase of 0.04%.
The homebuilder's stock has climbed by 5.22% in the past month, falling short of the Construction sector's gain of 11.71% and the S&P 500's gain of 12.24%.
Analysts and investors alike will be keeping a close eye on the performance of KB Home in its upcoming earnings disclosure. The company is expected to report EPS of $0.44, down 70.67% from the prior-year quarter. 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.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.13 per share and revenue of $5.02 billion, indicating changes of -51.99% and -19.44%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for KB Home. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 11.85% lower within the past month. KB Home is holding a Zacks Rank of #5 (Strong Sell) right now.
In the context of valuation, KB Home is at present trading with a Forward P/E ratio of 17.38. This valuation marks a premium compared to its industry average Forward P/E of 15.12.
Also, we should mention that KBH has a PEG ratio of 9.5. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Building Products - Home Builders industry held an average PEG ratio of 2.21.
The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 217, which puts it in the bottom 12% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).