KB Home(US:KBH) ZACKS·2025-07-23 16:31Core Viewpoint - KB Home's recent earnings report showed a mixed performance with earnings and revenues beating estimates but declining year-over-year, reflecting challenges in the housing market due to high mortgage rates and affordability concerns [2][3][5]. Earnings & Revenue Discussion - Adjusted earnings per share (EPS) for Q2 fiscal 2025 were $1.5, exceeding the Zacks Consensus Estimate of $1.45 by 3.5%, but down from $2.15 in the same quarter last year [5]. - Total revenues reached $1.53 billion, surpassing the consensus mark of $1.495 billion by 2.3%, yet decreased by 10.5% year-over-year [5]. Segmental Details - Homebuilding segment revenues were $1.525 billion, a decline of 10.4% from $1.702 billion in the prior year, with homes delivered dropping 11% to 3,120 units [6]. - The average selling price (ASP) increased by 1.2% year-over-year to $488,700 [6]. - Net orders fell by 13% to 3,460 units, with the value of net orders decreasing to $1.611 billion from $2.032 billion a year ago [7]. Financial Position - As of May 31, 2025, KB Home had cash and cash equivalents of $308.9 million, down from $598 million at the end of fiscal 2024, with total liquidity of $1.19 billion [12]. - The debt-to-capital ratio increased to 32.2 from 29.4 at the end of fiscal 2024 [12]. Guidance and Outlook - KB Home lowered its fiscal 2025 guidance, now expecting housing revenues between $6.30 billion and $6.5 billion, down from a previous range of $6.6 billion to $7 billion [14]. - The expected housing gross margin is now between 19% and 19.4%, compared to the prior range of 19.2% to 20% [15]. - The company anticipates SG&A expenses as a percentage of housing revenues to be in the range of 10.2% to 10.6% [16]. Market Performance - KB Home's stock has increased by approximately 11.2% since the last earnings report, outperforming the S&P 500 [1]. - The consensus estimate for KB Home has shifted downward by 18% since the earnings release, indicating a negative sentiment among investors [17].