NYSE:KBH, an undervalued stock with good fundamentals.

Last update: Oct 1, 2024

Our stock screener has singled out KB HOME (NYSE:KBH) as a stellar value proposition. NYSE:KBH not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Valuation Assessment of NYSE:KBH

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:KBH has received a 8 out of 10:

The Price/Earnings ratio is 10.99, which indicates a very decent valuation of KBH.
Based on the Price/Earnings ratio, KBH is valued a bit cheaper than the industry average as 76.19% of the companies are valued more expensively.
KBH is valuated cheaply when we compare the Price/Earnings ratio to 31.26, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 9.57, the valuation of KBH can be described as reasonable.
Based on the Price/Forward Earnings ratio, KBH is valued cheaper than 82.54% of the companies in the same industry.
KBH is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.55, which is the current average of the S&P500 Index.
Based on the Price/Free Cash Flow ratio, KBH is valued cheaper than 80.95% 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.
KBH has a very decent profitability rating, which may justify a higher PE ratio.
KBH's earnings are expected to grow with 12.50% in the coming years. This may justify a more expensive valuation.

Profitability Assessment of NYSE:KBH

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:KBH scores a 6 out of 10:

With a decent Return On Assets value of 8.86%, KBH is doing good in the industry, outperforming 65.08% of the companies in the same industry.
The Return On Equity of KBH (15.10%) is better than 65.08% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.73%, KBH is in the better half of the industry, outperforming 60.32% of the companies in the same industry.
The Profit Margin of KBH (9.36%) is better than 74.60% of its industry peers.
KBH's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 11.35%, KBH is in the better half of the industry, outperforming 61.90% of the companies in the same industry.
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.

Health Assessment of NYSE:KBH

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:KBH was assigned a score of 7 for health:

KBH has an Altman-Z score of 4.42. This indicates that KBH is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.42, KBH is doing good in the industry, outperforming 66.67% of the companies in the same industry.
The Debt to FCF ratio of KBH is 3.22, which is a good value as it means it would take KBH, 3.22 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of KBH (3.22) is better than 68.25% of its industry peers.
KBH has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
A Current Ratio of 5.95 indicates that KBH has no problem at all paying its short term obligations.
The Current ratio of KBH (5.95) is better than 79.37% of its industry peers.

ChartMill's Evaluation of Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:KBH scores a 4 out of 10:

KBH shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.25% yearly.
Based on estimates for the next years, KBH will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.50% on average per year.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.