In a market where value is scarce, NYSE:KBH offers a refreshing opportunity with its solid fundamentals.

Last update: Dec 4, 2024

Our stock screening tool has pinpointed KB HOME (NYSE:KBH) as an undervalued stock. NYSE:KBH maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

What does the Valuation looks like for NYSE:KBH

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:KBH boasts a 8 out of 10:

With a Price/Earnings ratio of 10.61, the valuation of KBH can be described as very reasonable.
Based on the Price/Earnings ratio, KBH is valued a bit cheaper than 75.38% of the companies in the same industry.
KBH is valuated cheaply when we compare the Price/Earnings ratio to 29.61, which is the current average of the S&P500 Index.
KBH is valuated reasonably with a Price/Forward Earnings ratio of 9.00.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KBH indicates a rather cheap valuation: KBH is cheaper than 86.15% of the companies listed in the same industry.
KBH is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.09, which is the current average of the S&P500 Index.
75.38% 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 a bit cheaper than 64.62% of the companies in the same industry.
The 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.
A more expensive valuation may be justified as KBH's earnings are expected to grow with 12.80% in the coming years.

Assessing Profitability for NYSE:KBH

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

KBH's Return On Assets of 10.93% is amongst the best of the industry. KBH outperforms 83.08% of its industry peers.
With a decent Return On Equity value of 18.75%, KBH is doing good in the industry, outperforming 75.38% of the companies in the same industry.
The Return On Invested Capital of KBH (12.03%) is better than 70.77% 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 75.38% of the companies in the same industry.
KBH's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 11.17%, KBH is doing good in the industry, outperforming 63.08% of the companies in the same industry.
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.

Health Analysis for NYSE:KBH

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:KBH, the assigned 5 for health provides valuable insights:

KBH has an Altman-Z score of 4.66. This indicates that KBH is financially healthy and has little risk of bankruptcy at the moment.
KBH's Altman-Z score of 4.66 is fine compared to the rest of the industry. KBH outperforms 64.62% 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.
Looking at the Current ratio, with a value of 5.77, KBH is in the better half of the industry, outperforming 78.46% of the companies in the same industry.

A Closer Look at Growth for NYSE:KBH

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:KBH has earned a 5 for growth:

Measured over the past years, KBH shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.25% on average per year.
Looking at the last year, KBH shows a very strong growth in Revenue. The Revenue has grown by 20.90%.
KBH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.80% yearly.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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.