KB Home (NYSE:KBH) Posts Quarterly Earnings Results, Beats Expectations By $0.17 EPS

KB Home (NYSE:KBH) posted its earnings results on Tuesday. The construction company reported $1.05 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.88 by $0.17, FiscalAI reports. The company had revenue of $1.30 billion for the quarter, compared to analysts’ expectations of $1.30 billion. KB Home had a return on equity of 6.56% and a net margin of 4.39%.The firm’s quarterly revenue was down 20.0% compared to the same quarter last year. During the same period last year, the business posted $1.61 earnings per share.

Here are the key takeaways from KB Home’s conference call:

• Housing conditions weakened as higher mortgage rates, persistent inflation, reduced consumer confidence, and increased resale inventory pressured traffic, orders, pricing, and affordability.
• Third-quarter results met or exceeded guidance, with $1.3 billion in housing revenue, $1.05 diluted EPS, and a 16.8% adjusted housing gross margin, though revenue and EPS declined year over year.
• KB Home’s built-to-order strategy reached 74% of deliveries, reducing inventory risk and helping margins improve sequentially; build times fell to 99 days and backlog grew year over year for the first time in four years.
• The company moderated fourth-quarter expectations, projecting average selling price of about $480,000 and gross margin of 16.0%–16.6%, citing Southern California weakness, pricing pressure, higher fuel and other costs, and less favorable geographic mix.
• Management maintained its full-year delivery and revenue outlook, cited more than 61,000 owned or controlled lots and substantial liquidity, and plans up to $50 million of additional share repurchases in the fourth quarter.

KB Home Price Performance

KBH stock opened at $47.94 on Friday. KB Home has a 1 year low of $44.03 and a 1 year high of $67.57. The company’s 50-day moving average is $53.64 and its 200-day moving average is $53.26. The stock has a market capitalization of $2.94 billion, a PE ratio of 13.50, a price-to-earnings-growth ratio of 2.51 and a beta of 1.34.

KB Home Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Thursday, August 20th. Stockholders of record on Thursday, August 6th were paid a $0.25 dividend. The ex-dividend date was Thursday, August 6th. This represents a $1.00 annualized dividend and a dividend yield of 2.1%. KB Home’s payout ratio is currently 28.17%.

Wall Street Analyst Weigh In

Several research analysts recently issued reports on the stock. Wall Street Zen raised shares of KB Home from a “sell” rating to a “hold” rating in a research report on Saturday, June 27th. UBS Group reaffirmed a “buy” rating on shares of KB Home in a report on Wednesday. Royal Bank Of Canada reissued a “market perform” rating on shares of KB Home in a research note on Wednesday. Barclays cut their price target on KB Home from $57.00 to $49.00 and set an “overweight” rating on the stock in a research note on Wednesday. Finally, Zacks Research cut shares of KB Home from a “hold” rating to a “strong sell” rating in a research report on Thursday, September 17th. Four investment analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have issued a Sell rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Hold” and a consensus price target of $56.00.

Insiders Place Their Bets

In other news, EVP Albert Z. Praw sold 22,015 shares of the company’s stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $58.70, for a total transaction of $1,292,280.50. Following the transaction, the executive vice president owned 104,062 shares of the company’s stock, valued at approximately $6,108,439.40. This represents a 17.46% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, Director Arthur Collins sold 4,000 shares of the firm’s stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $56.96, for a total value of $227,840.00. Following the transaction, the director owned 9,157 shares in the company, valued at $521,582.72. The trade was a 30.40% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 4.69% of the company’s stock.

About KB Home

KB Home (NYSE: KBH) is a homebuilding company that designs, constructs and sells residential properties in the United States. Its offerings primarily include single-family homes, with communities and floor plans intended for first-time buyers, move-up buyers and other owner-occupants. The company also provides homebuyers with opportunities to personalize selected features and finishes through its build-to-order approach.

The company operates in several major housing markets across the United States, including locations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, South Carolina, Texas and Washington.