NYSE:KBH is an undervalued gem with solid fundamentals.

KB HOME (NYSE:KBH) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:KBH showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Deciphering NYSE:KBH's Valuation Rating

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 7 out of 10:

• With a Price/Earnings ratio of 7.95, the valuation of KBH can be described as very cheap.
• Based on the Price/Earnings ratio, KBH is valued a bit cheaper than 80.00% of the companies in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 28.58, KBH is valued rather cheaply.
• A Price/Forward Earnings ratio of 7.96 indicates a rather cheap valuation of KBH.
• Based on the Price/Forward Earnings ratio, KBH is valued a bit cheaper than the industry average as 76.92% of the companies are valued more expensively.
• When comparing the Price/Forward Earnings ratio of KBH to the average of the S&P500 Index (95.03), we can say KBH is valued rather cheaply.
• KBH's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. KBH is cheaper than 84.62% of the companies in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of KBH indicates a somewhat cheap valuation: KBH is cheaper than 70.77% of the companies listed in the same industry.
• KBH has a very decent profitability rating, which may justify a higher PE ratio.

Profitability Analysis 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 11.36% is amongst the best of the industry. KBH outperforms 84.62% of its industry peers.
• With a decent Return On Equity value of 19.40%, KBH is doing good in the industry, outperforming 78.46% of the companies in the same industry.
• KBH has a better Return On Invested Capital (12.54%) than 72.31% of its industry peers.
• The last Return On Invested Capital (12.54%) for KBH is above the 3 year average (11.76%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 9.38%, KBH is in the better half of the industry, outperforming 73.85% of the companies in the same industry.
• In the last couple of years the Profit Margin of KBH has grown nicely.
• KBH's Operating Margin of 11.29% is fine compared to the rest of the industry. KBH outperforms 66.15% 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.

How We Gauge Health for NYSE:KBH

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:KBH, the assigned 6 reflects its health status:

• An Altman-Z score of 4.28 indicates that KBH is not in any danger for bankruptcy at the moment.
• KBH has a Altman-Z score of 4.28. This is in the better half of the industry: KBH outperforms 66.15% 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 5.74 indicates that KBH has no problem at all paying its short term obligations.
• KBH has a Current ratio of 5.74. This is in the better half of the industry: KBH outperforms 80.00% of its industry peers.

Deciphering NYSE:KBH's Growth Rating

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 6 for growth:

• The Earnings Per Share has grown by an impressive 20.31% over the past year.
• Measured over the past years, KBH shows a very strong growth in Earnings Per Share. The EPS has been growing by 24.25% on average per year.
• The Revenue has grown by 31.00% in the past year. This is a very strong growth!
• Measured over the past years, KBH shows a quite strong growth in Revenue. The Revenue has been growing by 8.77% on average per year.

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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.