NYSE:KBH appears to be flying under the radar despite its strong fundamentals.

Last update: Jul 12, 2024

Consider KB HOME (NYSE:KBH) as a top value stock, identified by our stock screening tool. NYSE:KBH shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Exploring NYSE:KBH's Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:KBH has earned a 7 for valuation:

Based on the Price/Earnings ratio of 9.76, the valuation of KBH can be described as reasonable.
69.23% of the companies in the same industry are more expensive than KBH, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.91. KBH is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 8.62 indicates a reasonable valuation of KBH.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KBH indicates a somewhat cheap valuation: KBH is cheaper than 72.31% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.49. KBH is valued rather cheaply when compared to this.
KBH's Price/Free Cash Flow ratio is rather cheap when compared to the industry. KBH is cheaper than 84.62% of the companies in the same industry.
KBH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of KBH may justify a higher PE ratio.

Profitability Assessment of NYSE:KBH

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:KBH was assigned a score of 6 for profitability:

KBH has a better Return On Assets (8.96%) than 73.85% of its industry peers.
The Return On Equity of KBH (15.42%) is better than 73.85% of its industry peers.
KBH has a Return On Invested Capital of 10.10%. This is in the better half of the industry: KBH outperforms 66.15% of its industry peers.
KBH has a Profit Margin of 9.22%. This is in the better half of the industry: KBH outperforms 73.85% of its industry peers.
In the last couple of years the Profit Margin of KBH has grown nicely.
The Operating Margin of KBH (11.45%) is better than 64.62% of its industry peers.
In the last couple of years the Operating Margin of KBH has grown nicely.
KBH's Gross Margin has improved in the last couple of years.

What does the Health looks like for NYSE:KBH

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:KBH scores a 7 out of 10:

KBH has an Altman-Z score of 4.27. This indicates that KBH is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of KBH (4.27) is better than 69.23% of its industry peers.
The Debt to FCF ratio of KBH is 1.73, which is an excellent value as it means it would take KBH, only 1.73 years of fcf income to pay off all of its debts.
KBH has a better Debt to FCF ratio (1.73) than 73.85% 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.
With a decent Current ratio value of 5.91, KBH is doing good in the industry, outperforming 80.00% of the companies in the same industry.

Growth Assessment of NYSE:KBH

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:KBH has achieved 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
KBH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.59% yearly.

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.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.