NYSE:KBH is probably undervalued for the fundamentals it is displaying.

Last update: Jun 20, 2024

Uncover the hidden value in KB HOME (NYSE:KBH) as our stock screening tool recommends it as an undervalued choice. NYSE:KBH maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

How do we evaluate the Valuation for NYSE:KBH?

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:KBH, the assigned 8 reflects its valuation:

Based on the Price/Earnings ratio of 9.00, the valuation of KBH can be described as reasonable.
Based on the Price/Earnings ratio, KBH is valued a bit cheaper than 72.73% of the companies in the same industry.
When comparing the Price/Earnings ratio of KBH to the average of the S&P500 Index (28.73), we can say KBH is valued rather cheaply.
A Price/Forward Earnings ratio of 7.95 indicates a rather cheap valuation of KBH.
80.30% of the companies in the same industry are more expensive than KBH, based on the Price/Forward Earnings ratio.
KBH's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.21.
65.15% of the companies in the same industry are more expensive than KBH, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, KBH is valued cheaply inside the industry as 89.39% of the companies are valued more expensively.
KBH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
KBH has a very decent profitability rating, which may justify a higher PE ratio.

Evaluating Profitability: NYSE:KBH

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:KBH has achieved a 6:

KBH has a better Return On Assets (8.96%) than 72.73% of its industry peers.
With a decent Return On Equity value of 15.42%, KBH is doing good in the industry, outperforming 72.73% of the companies in the same industry.
KBH has a better Return On Invested Capital (10.10%) than 65.15% of its industry peers.
The Profit Margin of KBH (9.22%) is better than 74.24% of its industry peers.
KBH's Profit Margin has improved in the last couple of years.
KBH's Operating Margin of 11.45% is fine compared to the rest of the industry. KBH outperforms 65.15% of its industry peers.
In the last couple of years the Operating Margin of KBH has grown nicely.
In the last couple of years the Gross Margin of KBH has grown nicely.

A Closer Look at Health for NYSE:KBH

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:KBH has earned a 7 out of 10:

An Altman-Z score of 4.18 indicates that KBH is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.18, KBH is doing good in the industry, outperforming 68.18% of the companies in the same industry.
KBH has a debt to FCF ratio of 1.73. This is a very positive value and a sign of high solvency as it would only need 1.73 years to pay back of all of its debts.
KBH has a better Debt to FCF ratio (1.73) than 74.24% of its industry peers.
A Debt/Equity ratio of 0.44 indicates that KBH is not too dependend on debt financing.
KBH has a Current Ratio of 5.91. This indicates that KBH is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of KBH (5.91) is better than 80.30% of its industry peers.

Growth Assessment of NYSE:KBH

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:KBH boasts a 4 out of 10:

The Earnings Per Share has been growing by 20.25% on average over the past years. This is a very strong growth
The Earnings Per Share is expected to grow by 11.59% on average over the next years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of KBH contains the most current fundamental analsysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.