Joe Hendrickson One industry that I have been very bullish about for well over a year now is the homebuilding industry. Estimates vary, but usually the consensus is that this country is suffering from a shortage of between 4 million and 7 million homes. Until this shortage is reduced significantly, I would argue that the housing market would be quite attractive for investors. And one company that I have been bullish on during this time, and actually longer, is KB Home (NYSE:KBH). KB Home Overwhelmingly, ...

Company Performance - KB Home's stock closed at $79.71, reflecting a -0.98% change from the previous day, underperforming the S&P 500 which gained 1.07% [1] - Over the past month, KB Home's shares increased by 0.12%, lagging behind the Construction sector's gain of 2.28% and the S&P 500's gain of 2.92% [1] - The upcoming earnings report on September 24, 2024, is expected to show an EPS of $2.04, representing a 13.33% growth year-over-year, with revenue projected at $1.73 billion, an 8.88% increase from the same quarter last year [1] Annual Forecast - Zacks Consensus Estimates predict KB Home's earnings for the year to be $8.38 per share and revenue at $6.84 billion, indicating increases of +19.2% and +6.68% respectively compared to the previous year [2] - Recent modifications to analyst estimates reflect short-term business trends, with upward revisions indicating analysts' positive outlook on the company's profitability [2] Valuation Metrics - KB Home currently has a Zacks Rank of 2 (Buy), with a Forward P/E ratio of 9.6, consistent with the industry average [3] - The company has a PEG ratio of 0.81, compared to the industry average PEG ratio of 0.96, indicating a favorable growth outlook relative to its valuation [3] Industry Context - The Building Products - Home Builders industry is ranked 27 in the Zacks Industry Rank, placing it in the top 11% of over 250 industries [4] - Strong industry performance is indicated by the Zacks Industry Rank, which shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [4]

Core Insights - KB Home (KBH) has a stronger Zacks Rank of 2 (Buy) compared to D.R. Horton (DHI) which has a Zacks Rank of 3 (Hold), indicating a better earnings outlook for KBH [1] - Value investors utilize various valuation metrics to assess whether a company is undervalued, with KBH showing more favorable metrics than DHI [2] Valuation Metrics - KBH has a forward P/E ratio of 9.60, significantly lower than DHI's forward P/E of 13.37, suggesting KBH is more attractively priced [2] - The PEG ratio for KBH is 0.81, while DHI's PEG ratio is 0.87, indicating that KBH offers better value relative to its expected earnings growth [2] - KBH's P/B ratio stands at 1.52, compared to DHI's P/B of 2.43, further supporting the argument that KBH is undervalued [2] Overall Value Assessment - Based on the valuation metrics, KBH earns a Value grade of A, while DHI receives a Value grade of C, highlighting KBH as the superior value option at this time [3]

KB Home (KBH) closed at $78.86 in the latest trading session, marking a -1.45% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.3% for the day. Meanwhile, the Dow lost 0.54%, and the Nasdaq, a tech-heavy index, added 0.25%.Heading into today, shares of the homebuilder had gained 3.49% over the past month, outpacing the Construction sector's gain of 0.95% and the S&P 500's gain of 3.42% in that time.The investment community will be closely monitoring the performance ...

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KB Home (KBH) shares have surged 30.9% year to date (YTD), outperforming the broader Zacks Construction sector’s return of 16.2% and the Zacks  Building Products - Home Builders industry’s gain of 22%. In fact, shares of this Los Angeles, CA-based homebuilder have rallied 26% since its second quarter of fiscal 2024 earnings release on Jun 18, outperforming the homebuilding industry’s 23% rise.In its most recent quarterly report, KB Home posted revenues of $1.71 billion, surpassing analyst estimates by 4.3%. ...

Economic Outlook - The World Economic Symposium in Jackson Hole, WY, is a key event where global economic leaders discuss pressing issues and forecasts for the remainder of the year [1] - Pre-market futures indicate a positive sentiment in the stock market, with the Dow up 175 points (+0.43%), Nasdaq up 162 points (+0.83%), S&P 500 up 0.56%, and Russell 2000 up 0.50% [1] Interest Rates and Bond Yields - Current bond yields show the 10-year at 3.837% and the 2-year at 3.996%, with expectations of potential inversion if the Fed cuts rates at the upcoming meeting [2] - Historical context indicates that interest rates above 5% are rare, with significant cuts typically being 50 basis points during major economic crises [3] Federal Reserve Actions - The expectation is for a 25 basis point cut in rates rather than a 50 basis point cut, reflecting a cautious approach by Fed Chair Jerome Powell [4] - Upcoming economic indicators, including Personal Consumption Expenditures (PCE) and Consumer Price Inflation (CPI), will be critical in shaping the Fed's decisions [4][5] Labor Market Insights - The labor market's performance is crucial for the Fed's dual mandate of controlling inflation and achieving full employment, with job creation numbers being closely monitored [5] - If job creation remains in the 150-175K range or lower, the likelihood of a 50 basis point cut increases [5] Housing Market Update - New Home Sales for July are expected to rise to 620K, indicating a slight improvement from previous lows, although still considered weak [6] - A significant recovery in both new and existing home sales is anticipated once interest rates decline, which would lower mortgage rates and stimulate the economy [6]

Core Viewpoint - Investors in the Building Products - Home Builders sector should consider KB Home (KBH) and Persimmon Plc (PSMMY) for potential value investment opportunities, with KBH currently appearing more attractive based on various metrics [1]. Group 1: Zacks Rank and Earnings Estimates - KBH has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while PSMMY has a Zacks Rank of 3 (Hold), suggesting a less favorable earnings estimate revision trend [1]. - The Zacks Rank system emphasizes companies with strong earnings estimate revisions, making KBH a more appealing option for value investors [1]. Group 2: Valuation Metrics - KBH has a forward P/E ratio of 9.46, significantly lower than PSMMY's forward P/E of 20.42, indicating that KBH may be undervalued relative to PSMMY [2]. - The PEG ratio for KBH is 0.80, compared to PSMMY's PEG ratio of 1.44, suggesting that KBH offers better value when considering expected earnings growth [2]. - KBH's P/B ratio is 1.49, while PSMMY's P/B ratio is 1.64, further supporting the notion that KBH is more attractively valued [2]. Group 3: Overall Value Grades - KBH has received a Value grade of A, while PSMMY has a Value grade of C, indicating that KBH is viewed more favorably in terms of value metrics [3]. - The combination of Zacks Rank and Style Scores positions KBH as the better option for value investors at this time [3].

KB Home (KBH) closed the latest trading day at $79.92, indicating a +1.05% change from the previous session's end. This move lagged the S&P 500's daily gain of 1.61%. Meanwhile, the Dow experienced a rise of 1.39%, and the technology-dominated Nasdaq saw an increase of 2.34%.The homebuilder's stock has dropped by 2.02% in the past month, falling short of the Construction sector's gain of 2.06% and outpacing the S&P 500's loss of 2.88%.The upcoming earnings release of KB Home will be of great interest to inv ...

KB Home (KBH) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, KBH broke through the 20-day moving average, which suggests a short-term bullish trend.The 20-day simple moving average is a popular investing tool. Traders like this SMA because it offers a look back at a stock's price over a shorter period and helps smooth out price fluctuations. The 20-day can also show more trend reversal signals than longer-term moving averages.Similar to ot ...