KB Home (KBH) Gains But Lags Market: What You Should Know

KB Home (KBH) closed at $43.42 in the latest trading session, marking a +0.07% move from the prior day. This move lagged the S&P 500's daily gain of 0.62%. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.03%.

- Zacks

Coming into today, shares of the homebuilder had lost 0.28% in the past month. In that same time, the Construction sector gained 0.44%, while the S&P 500 gained 0.87%.

Investors will be hoping for strength from KB Home as it approaches its next earnings release, which is expected to be January 12, 2022. The company is expected to report EPS of $1.77, up 58.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.72 billion, up 43.7% from the prior-year quarter.

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, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. KB Home currently has a Zacks Rank of #3 (Hold).

In terms of valuation, KB Home is currently trading at a Forward P/E ratio of 5.51. This valuation marks a discount compared to its industry's average Forward P/E of 6.75.

Meanwhile, KBH's PEG ratio is currently 0.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Home Builders industry currently had an average PEG ratio of 0.35 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 115, putting it in the top 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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