KB Home Q3 Earnings: Can KBH Hit Its $0.51 EPS Target?

in EARNINGS by

KB Home (NYSE:KBH) is scheduled to report Q3 earnings results on September 22, 2020. Webcast details can be found here.

The company is expected to report earnings of $0.51/share on revenue of $885.5 million. The consensus earnings per share (EPS) of $0.51/share is based on a poll of 13 analysts and represents a decline of -29.5% over the same quarter last year when the company reported earnings of $0.73/share.

The revenue forecast of $885.5 million based on a poll of 13 analysts implies a year-over-year (YoY) decline of -24%. Last year the company reported $856 million in revenue for the quarter.

MetricExpectedPrior YearYoY Change
Revenue$885.5$856-24%
EPS$0.51$0.73-29.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from KB Home for earnings this quarter? Let us know in the comments!

Source: Finbox

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the 2nd Quarter, 2020 the stock price reacted by falling by -13.77%.

Source: Finbox

Fundamentals And Technical Analysis

KB Home is currently trading at $39.07/share, up 1.19% for the day. The company is trading at approximately 96.4% of its 52-week high of $40.51/share. The company’s stock price is up 13.6% this year and up 6.40% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 62.42 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 11.6x and a forward P/E multiple of 25.7x. KBH’s current share price also implies a price-to-book (P/B) multiple of 1.4x. The following table summarizes some other key fundamental ratios:

Valuation MetricsValueSector Mean
P/E Ratio11.605.30
Shareholder Yield2.10%-4.14%
EV/EBITDA 10.4910.66

Profitability MetricsValueSector Mean
ROIC7.37%3.65%
ROA6.08%-1.77%
Cash ROA11.77%7.20%
ROE12.86%-7.44%

Efficiency MetricsValueSector Mean
Asset Turnover0.951
Fixed Asset Turnover59.214.61
Cash Conversion Cycle333.0550.66

Dividend MetricsValueSector Mean
Dividend Rate$0.36/Share
Dividend Yield0.93%
Dividend Coverage Ratio18.175.41
Dividend Payout Ratio10.64%20.68%

Financial ScoresValueSector Mean
Montier C-Score12.85
Altman Z-Score3.582.68
Piotroski F-Score84

Source: Finbox

Company Profile: KB Home

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. The company 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.

It also offers financial services, such as insurance products and title services. It has operations in Arizona, California, Colorado, Florida, 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 headquartered in Los Angeles, California

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