KB Home Stock Slides After Earnings: What to Know
KB Home stock is lower Wednesday after the homebuilder reported mixed earnings results and revised its full-year outlook.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
KB Home (KBH) stock is notably lower Wednesday after the homebuilder reported mixed results for its fiscal third quarter and updated its full-year outlook.
In the three months ended August 31, KB Home's revenue increased 10.4% to $1.75 billion, as its home deliveries rose 7.6% year-over-year to 3,631 and its average selling price jumped 3.1% to $480,900.
The company also said earnings per share (EPS) were up 13.3% from the year-ago period to $2.04.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"In the third quarter, we achieved strong year-over-year growth in both revenues and diluted earnings per share," said KB Home CEO Jeffrey Mezger in a statement. The executive added that the homebuilder "experienced variability in demand across the quarter, with softening in late June through July, as buyers continued to evaluate elevated mortgage interest rates, and general economic concerns were rising."
Metzger said that he is "encouraged" by a strengthening in demand the company saw in August as mortgage rates moderated.
KB Home's results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $1.73 billion and earnings of $2.06 per share, according to MarketWatch.
The company also updated its full-year outlook. KBH now anticipates revenue in the range of $6.85 billion to $6.95 billion, an average selling price of approximately $490,000 and a housing gross profit margin that's between 21.1% to 21.2%.
This compares with its previous outlook of revenue in the range of $6.7 billion to $6.9 billion, an average selling price of $485,000 to $495,000 and a gross profit margin of 21.1% to 21.5%.
The weakness in KBH's share price Wednesday could be due to the revised housing gross profit margin expectations, which impacted competitor Lennar's (LEN) stock last week following its earnings release.
Is KB Home stock a buy, sell or hold?
KB Home has outperformed the broad market in 2024, up 41% on a total return basis (price change plus dividend) vs the S&P 500's 21% gain. Still, Wall Street is on the sidelines when it comes to the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for KBH stock is $81.23, representing a discount of about 3% to current levels. Meanwhile, the consensus recommendation is Hold.
Financial services firm Wedbush raised its price target on KBH stock to $75 from $67 after earnings, but maintained its Neutral rating (equivalent to a Hold).
The price-target hike comes amid the shift to a fiscal 2025 valuation from a fiscal 2024 one, says Wedbush analyst Jay McCanless. "Fiscal third-quarter order growth was less than we expected due to year-over-year declines in KB's Southwest and Southeast segments," he adds, while noting that the company cut prices early in Q3 to maintain sales pace, which likely put pressure on the bottom line.
"On a positive note, KB indicated traffic and sales absorption improved in sync with lower mortgage rates through August and into September," McCanless says.
Related Content
-
5 Vince Lombardi Quotes Retirees Should Live ByThe iconic football coach's philosophy can help retirees win at the game of life.
-
The $200,000 Olympic 'Pension' is a Retirement Game-Changer for Team USAThe donation by financier Ross Stevens is meant to be a "retirement program" for Team USA Olympic and Paralympic athletes.
-
10 Cheapest Places to Live in ColoradoProperty Tax Looking for a cozy cabin near the slopes? These Colorado counties combine reasonable house prices with the state's lowest property tax bills.
-
Don't Bury Your Kids in Taxes: How to Position Your Investments to Help Create More Wealth for ThemTo minimize your heirs' tax burden, focus on aligning your investment account types and assets with your estate plan, and pay attention to the impact of RMDs.
-
Are You 'Too Old' to Benefit From an Annuity?Probably not, even if you're in your 70s or 80s, but it depends on your circumstances and the kind of annuity you're considering.
-
In Your 50s and Seeing Retirement in the Distance? What You Do Now Can Make a Significant ImpactThis is the perfect time to assess whether your retirement planning is on track and determine what steps you need to take if it's not.
-
Your Retirement Isn't Set in Stone, But It Can Be a Work of ArtSetting and forgetting your retirement plan will make it hard to cope with life's challenges. Instead, consider redrawing and refining your plan as you go.
-
The Bear Market Protocol: 3 Strategies to Consider in a Down MarketThe Bear Market Protocol: 3 Strategies for a Down Market From buying the dip to strategic Roth conversions, there are several ways to use a bear market to your advantage — once you get over the fear factor.
-
Dow Adds 1,206 Points to Top 50,000: Stock Market TodayThe S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
-
The Best Precious Metals ETFs to Buy in 2026Precious metals ETFs provide a hedge against monetary debasement and exposure to industrial-related tailwinds from emerging markets.
-
For the 2% Club, the Guardrails Approach and the 4% Rule Do Not Work: Here's What Works InsteadFor retirees with a pension, traditional withdrawal rules could be too restrictive. You need a tailored income plan that is much more flexible and realistic.
