KB Home (NYSE:KBH) & Sonos (NASDAQ:SONO) Financial Survey

KB Home (NYSE:KBH) and Sonos (NASDAQ:SONO) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Volatility and Risk

KB Home has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500. Comparatively, Sonos has a beta of 1.93, meaning that its stock price is 93% more volatile than the S&P 500.

Profitability

This table compares KB Home and Sonos’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KB Home	4.94%	7.67%	4.37%
Sonos	3.82%	19.10%	8.67%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for KB Home and Sonos, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KB Home	1	10	4	0	2.20
Sonos	0	3	2	0	2.40

KB Home presently has a consensus price target of $60.17, suggesting a potential upside of 15.20%. Sonos has a consensus price target of $20.00, suggesting a potential upside of 23.76%. Given Sonos’ stronger consensus rating and higher possible upside, analysts plainly believe Sonos is more favorable than KB Home.

Institutional and Insider Ownership

96.1% of KB Home shares are held by institutional investors. Comparatively, 85.8% of Sonos shares are held by institutional investors. 4.7% of KB Home shares are held by insiders. Comparatively, 1.3% of Sonos shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares KB Home and Sonos”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KB Home	$6.24 billion	0.51	$428.79 million	$2.87	18.20
Sonos	$1.44 billion	1.32	-$61.14 million	$0.45	35.91

KB Home has higher revenue and earnings than Sonos. KB Home is trading at a lower price-to-earnings ratio than Sonos, indicating that it is currently the more affordable of the two stocks.

About KB Home

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.

About Sonos

Sonos, Inc., together with its subsidiaries, designs, develops, manufactures, and sells audio products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers wireless, portable, and home theater speakers; components; and accessories. The company offers its products through approximately 10,000 third-party retail stores, including custom installers of home audio systems; and e-commerce retailers, as well as through its website. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was incorporated in 2002 and is headquartered in Santa Barbara, California.