NYSE:KBH is an undervalued gem with solid fundamentals.

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.

Assessing Valuation Metrics for 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 10.40, which indicates a very decent valuation of KBH.
• Based on the Price/Earnings ratio, KBH is valued a bit cheaper than 75.81% of the companies in the same industry.
• When comparing the Price/Earnings ratio of KBH to the average of the S&P500 Index (31.46), we can say KBH is valued rather cheaply.
• The Price/Forward Earnings ratio is 9.06, which indicates a very decent valuation of KBH.
• Based on the Price/Forward Earnings ratio, KBH is valued cheaply inside the industry as 82.26% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Forward Earnings ratio of 22.63, KBH is valued rather cheaply.
• Based on the Enterprise Value to EBITDA ratio, KBH is valued cheaply inside the industry as 82.26% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, KBH is valued a bit cheaper than the industry average as 61.29% of the companies are valued more expensively.
• The 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.
• KBH's earnings are expected to grow with 12.50% in the coming years. This may justify a more expensive valuation.

Evaluating Profitability: 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 7 out of 10:

• Looking at the Return On Assets, with a value of 10.93%, KBH belongs to the top of the industry, outperforming 80.65% of the companies in the same industry.
• KBH's Return On Equity of 18.75% is fine compared to the rest of the industry. KBH outperforms 74.19% of its industry peers.
• KBH has a better Return On Invested Capital (12.03%) than 72.58% of its industry peers.
• The 3 year average ROIC (11.87%) for KBH is below the current ROIC(12.03%), indicating increased profibility in the last year.
• Looking at the Profit Margin, with a value of 9.26%, KBH is in the better half of the industry, outperforming 74.19% of the companies in the same industry.
• In the last couple of years the Profit Margin of KBH has grown nicely.
• KBH has a Operating Margin of 11.17%. This is in the better half of the industry: KBH outperforms 62.90% of its industry peers.
• KBH's Operating Margin has improved in the last couple of years.
• KBH's Gross Margin has improved in the last couple of years.

How do we evaluate the Health for NYSE:KBH?

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:KBH has received a 5 out of 10:

• KBH has an Altman-Z score of 4.67. This indicates that KBH is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of KBH (4.67) is better than 66.13% of its industry peers.
• A Debt/Equity ratio of 0.42 indicates that KBH is not too dependend on debt financing.
• A Current Ratio of 5.77 indicates that KBH has no problem at all paying its short term obligations.
• KBH has a Current ratio of 5.77. This is in the better half of the industry: KBH outperforms 77.42% of its industry peers.

Evaluating Growth: 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 5 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.
• The Revenue has grown by 20.90% in the past year. 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 12.50% yearly.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of KBH

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.