Is KB Home overvalued?
 | By Rifka Kats | Macroaxis Story |
KB Home is generating buzz as October approaches, with its stock showing potential for unexpected movements. The company reported a solid net income of 590.2M, reflecting a profit margin of 9.43%. With an earnings per share (EPS) of 7.56 and a price-to-earnings (PE) ratio of 11.67, the stock appears reasonably valued in the residential construction sector. Analysts are divided, with two strong sell ratings against two buy recommendations, indicating a mix of sentiment in the market. The PEG ratio of 0.63 suggests that the stock may be undervalued relative to its growth prospects. As investors weigh the possible upside price of 89.91 against a downside of 84.79, KB Home could surprise many this month, especially with its robust revenue per share of 83.16 and a book value of 53.08. With growing interest in the household durables sector, it's worth taking a closer look at KB Home. We remain hopeful about its potential for recovery. In this article, I’ll highlight key factors influencing KB Home's offerings and discuss how these elements could shape the company's outlook for active traders this year.
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Reviewed by Gabriel Shpitalnik
Investing in KB Home (NYSE: KBH) could be intriguing this October, especially with a low PEG ratio of 0.63 indicating potential undervaluation in the residential construction sector. Additionally, the company's enterprise value stands at a robust 7.7B, suggesting solid fundamentals that may surprise investors as the fiscal year wraps up in November.
Key Points
KB Home has a performance score of just 13 out of 100, indicating it may not be performing well. The company's Beta is 1.92, suggesting it carries a higher risk compared to the overall market. This means that when the market rises, KB Home is likely to do better, but if the market falls, it may struggle more than others. To make an informed decision about KB Home's stock, consider looking into its Treynor ratio, expected shortfall, and the relationship between its Jensen alpha and potential upside. These metrics can help you assess whether the stock's current price trend is likely to change.The performance of KB Home in the marketplace will significantly impact your decision to invest in its stock. Revenue growth, profitability, competitive positioning, management quality, and industry trends can influence KB Home's stock prices. When investing in KB Home, there are several factors to consider and potential outcomes to expect. As a company performs well, its stock price may increase, allowing investors to benefit from price appreciation. However, KBH Stock can experience significant price fluctuations due to market conditions, economic factors, industry trends, or company-specific news. This is why investing in stocks such as KB Home carries risks, including the potential for capital loss. Stock prices can decline, and investors may incur losses if they sell shares at a lower price than their initial investment.And What about dividends?
A dividend is the distribution of a portion of KB Home earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. KB Home dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. KBH one year expected dividend income is about USD0.58 per share.
As of now, KB Home's Dividends Paid is increasing as compared to previous years. The KB Home's current Dividend Payout Ratio is estimated to increase to 0.15, while Dividend Yield is projected to decrease to 0.01. | Last Reported | Projected for Next Year | ||
| Dividends Paid | 82.3 M | 86.4 M | |
| Dividend Yield | 0.01 | 0.01 | |
| Dividend Payout Ratio | 0.13 | 0.15 | |
| Dividend Paid And Capex Coverage Ratio | 3.76 | 2.90 |
Investing in dividend-paying stocks, such as KB Home is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in KB Home must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for KB Home. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.How important is KB Home's Liquidity
KB Home financial leverage refers to using borrowed capital as a funding source to finance KB Home ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. KB Home financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to KB Home's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of KB Home's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between KB Home's total debt and its cash.
What do experts say about KBH?
Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
Analysis ConsensusBreaking down KB Home Further
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. KB Home has an asset utilization ratio of 96.42 percent. This signifies that the Company is making $0.96 for each dollar of assets. An increasing asset utilization means that KB Home is more efficient with each dollar of assets it utilizes for everyday operations. In the world of investing, timing can be everything. KB Home (NYSE: KBH) is currently showing some intriguing signs as October unfolds. With a solid current ratio of 3.65X and a market capitalization of $6.63 billion, the company appears to be in a strong liquidity position. However, a quarterly revenue growth of -0.03 raises some caution, despite a healthy EBITDA of $718.74 million. The stock's PEG ratio of 0.63 suggests it may be undervalued, making it an interesting prospect for investors looking for potential surprises this month. With a target price of $78.17, KB Home could be on the verge of a rebound, especially given its robust institutional ownership of 87.86%.
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