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

Last update: Dec 25, 2024

Our stock screening tool has pinpointed KB HOME (NYSE:KBH) as an undervalued stock option. NYSE:KBH retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Understanding NYSE:KBH's Valuation Score

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:KBH scores a 8 out of 10:

A Price/Earnings ratio of 8.51 indicates a reasonable valuation of KBH.
Compared to the rest of the industry, the Price/Earnings ratio of KBH indicates a somewhat cheap valuation: KBH is cheaper than 75.00% of the companies listed in the same industry.
KBH is valuated cheaply when we compare the Price/Earnings ratio to 27.54, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 7.34 indicates a rather cheap valuation of KBH.
Based on the Price/Forward Earnings ratio, KBH is valued cheaper than 84.38% of the companies in the same industry.
KBH is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.99, which is the current average of the S&P500 Index.
KBH's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. KBH is cheaper than 79.69% of the companies in the same industry.
KBH's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. KBH is cheaper than 65.63% 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 12.93% in the coming years.

Profitability Insights: 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 82.81% of its industry peers.
Looking at the Return On Equity, with a value of 18.75%, KBH is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
The Return On Invested Capital of KBH (12.03%) is better than 70.31% 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.
The Profit Margin of KBH (9.26%) is better than 73.44% of its industry peers.
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 65.63% 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.

Unpacking NYSE:KBH's Health Rating

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 5 out of 10:

An Altman-Z score of 4.41 indicates that KBH is not in any danger for bankruptcy at the moment.
KBH's Altman-Z score of 4.41 is fine compared to the rest of the industry. KBH outperforms 65.63% of its industry peers.
A Debt/Equity ratio of 0.42 indicates that KBH is not too dependend on debt financing.
KBH has a Current Ratio of 5.77. This indicates that KBH is financially healthy and has no problem in meeting its short term obligations.
KBH's Current ratio of 5.77 is fine compared to the rest of the industry. KBH outperforms 79.69% of its industry peers.

What does the Growth looks like for NYSE:KBH

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:KBH was assigned a score of 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%.
The Earnings Per Share is expected to grow by 12.93% on average over the next years. This is quite good.

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

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.