KB HOME (KBH)
US48666K1097 - Common Stock
We assign a fundamental rating of 6 out of 10 to KBH. KBH was compared to 66 industry peers in the Household Durables industry. KBH has an excellent profitability rating, but there are some minor concerns on its financial health. KBH may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make KBH suitable for value investing!
1. Profitability
1.1 Basic Checks
KBH had positive earnings in the past year.
KBH had a positive operating cash flow in the past year.
KBH had positive earnings in each of the past 5 years.
Of the past 5 years KBH 4 years had a positive operating cash flow.
1.2 Ratios
KBH has a better Return On Assets (10.93%) than 82.81% of its industry peers.
KBH has a Return On Equity of 18.75%. This is in the better half of the industry: KBH outperforms 75.00% of its industry peers.
With a decent Return On Invested Capital value of 12.03%, KBH is doing good in the industry, outperforming 70.31% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for KBH is in line with the industry average of 11.80%.
The 3 year average ROIC (11.87%) for KBH is below the current ROIC(12.03%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.93% | ||
| ROE | 18.75% | ||
| ROIC | 12.03% |
ROA(3y)10.22%
ROA(5y)8.3%
ROE(3y)18.73%
ROE(5y)15.69%
ROIC(3y)11.87%
ROIC(5y)9.52%
1.3 Margins
Looking at the Profit Margin, with a value of 9.26%, KBH is in the better half of the industry, outperforming 73.44% of the companies in the same industry.
In the last couple of years the Profit Margin of KBH has grown nicely.
Looking at the Operating Margin, with a value of 11.17%, KBH is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
KBH's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 21.44%, KBH is doing worse than 78.13% of the companies in the same industry.
KBH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.17% | ||
| PM (TTM) | 9.26% | ||
| GM | 21.44% |
OM growth 3Y13.14%
OM growth 5Y8.2%
PM growth 3Y9.06%
PM growth 5Y19.66%
GM growth 3Y3.92%
GM growth 5Y4.04%
2. Health
2.1 Basic Checks
KBH has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for KBH has been reduced compared to 1 year ago.
The number of shares outstanding for KBH has been reduced compared to 5 years ago.
The debt/assets ratio for KBH has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.40 indicates that KBH is not in any danger for bankruptcy at the moment.
KBH's Altman-Z score of 4.40 is fine compared to the rest of the industry. KBH outperforms 65.63% of its industry peers.
KBH has a debt to FCF ratio of 6.22. This is a slightly negative value and a sign of low solvency as KBH would need 6.22 years to pay back of all of its debts.
KBH has a Debt to FCF ratio of 6.22. This is comparable to the rest of the industry: KBH outperforms 54.69% 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.
KBH's Debt to Equity ratio of 0.42 is in line compared to the rest of the industry. KBH outperforms 42.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 6.22 | ||
| Altman-Z | 4.4 |
ROIC/WACC1.41
WACC8.51%
2.3 Liquidity
A Current Ratio of 5.77 indicates that KBH has no problem at all paying 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.
A Quick Ratio of 0.69 indicates that KBH may have some problems paying its short term obligations.
With a Quick ratio value of 0.69, KBH is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.77 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.83% over the past year.
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!
Measured over the past years, KBH shows a small growth in Revenue. The Revenue has been growing by 7.11% on average per year.
EPS 1Y (TTM)1.83%
EPS 3Y31.02%
EPS 5Y20.25%
EPS Q2Q%13.33%
Revenue 1Y (TTM)20.9%
Revenue growth 3Y15.29%
Revenue growth 5Y7.11%
Sales Q2Q%10.43%
3.2 Future
Based on estimates for the next years, KBH will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.80% on average per year.
Based on estimates for the next years, KBH will show a small growth in Revenue. The Revenue will grow by 7.21% on average per year.
EPS Next Y20.96%
EPS Next 2Y14.25%
EPS Next 3Y12.8%
EPS Next 5YN/A
Revenue Next Year8.91%
Revenue Next 2Y7.68%
Revenue Next 3Y7.21%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 8.44, which indicates a very decent 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 27.73, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 7.17, the valuation of KBH can be described as very cheap.
KBH's Price/Forward Earnings ratio is rather cheap when compared to the industry. KBH is cheaper than 82.81% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.83. KBH is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.44 | ||
| Fwd PE | 7.17 |
4.2 Price Multiples
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KBH indicates a somewhat cheap valuation: KBH is cheaper than 64.06% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.76 | ||
| EV/EBITDA | 6.54 |
4.3 Compensation for Growth
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.
A more expensive valuation may be justified as KBH's earnings are expected to grow with 12.80% in the coming years.
PEG (NY)0.4
PEG (5Y)0.42
EPS Next 2Y14.25%
EPS Next 3Y12.8%
5. Dividend
5.1 Amount
KBH has a Yearly Dividend Yield of 1.52%.
The stock price of KBH dropped by -24.50% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
KBH's Dividend Yield is a higher than the industry average which is at 2.76.
KBH's Dividend Yield is slightly below the S&P500 average, which is at 2.24.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.52% |
5.2 History
On average, the dividend of KBH grows each year by 47.74%, which is quite nice.
KBH has paid a dividend for at least 10 years, which is a reliable track record.
KBH has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)47.74%
Div Incr Years2
Div Non Decr Years11
5.3 Sustainability
KBH pays out 9.20% of its income as dividend. This is a sustainable payout ratio.
KBH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP9.2%
EPS Next 2Y14.25%
EPS Next 3Y12.8%
KB HOME
NYSE:KBH (12/20/2024, 8:21:05 PM)
After market: 65.86 0 (0%)65.86
+0.05 (+0.08%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners108.54%
Inst Owner Change-6.15%
Ins Owners3.04%
Ins Owner Change-0.88%
Market Cap4.83B
Analysts53.91
Price Target86.87 (31.9%)
Short Float %8.86%
Short Ratio5.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.52% |
Dividend Growth(5Y)47.74%
DP9.2%
Div Incr Years2
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)8.23%
Min EPS beat(2)-1.73%
Max EPS beat(2)18.2%
EPS beat(4)3
Avg EPS beat(4)8.94%
Min EPS beat(4)-1.73%
Max EPS beat(4)18.2%
EPS beat(8)6
Avg EPS beat(8)14.44%
EPS beat(12)9
Avg EPS beat(12)11.4%
EPS beat(16)12
Avg EPS beat(16)11.02%
Revenue beat(2)2
Avg Revenue beat(2)1.47%
Min Revenue beat(2)0.44%
Max Revenue beat(2)2.51%
Revenue beat(4)3
Avg Revenue beat(4)1.17%
Min Revenue beat(4)-0.29%
Max Revenue beat(4)2.51%
Revenue beat(8)6
Avg Revenue beat(8)4.41%
Revenue beat(12)7
Avg Revenue beat(12)2.21%
Revenue beat(16)8
Avg Revenue beat(16)0.75%
PT rev (1m)0%
PT rev (3m)13.18%
EPS NQ rev (1m)-0.28%
EPS NQ rev (3m)1.21%
EPS NY rev (1m)0%
EPS NY rev (3m)0.57%
Revenue NQ rev (1m)-0.3%
Revenue NQ rev (3m)3.03%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.44 | ||
| Fwd PE | 7.17 | ||
| P/S | 0.6 | ||
| P/FCF | 17.76 | ||
| P/OCF | 15.57 | ||
| P/B | 1.21 | ||
| P/tB | 1.21 | ||
| EV/EBITDA | 6.54 |
EPS(TTM)7.8
EY11.84%
EPS(NY)9.19
Fwd EY13.95%
FCF(TTM)3.71
FCFY5.63%
OCF(TTM)4.23
OCFY6.42%
SpS110.08
BVpS54.37
TBVpS54.37
PEG (NY)0.4
PEG (5Y)0.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.93% | ||
| ROE | 18.75% | ||
| ROCE | 15.75% | ||
| ROIC | 12.03% | ||
| ROICexc | 12.87% | ||
| ROICexgc | 13.04% | ||
| OM | 11.17% | ||
| PM (TTM) | 9.26% | ||
| GM | 21.44% | ||
| FCFM | 3.37% |
ROA(3y)10.22%
ROA(5y)8.3%
ROE(3y)18.73%
ROE(5y)15.69%
ROIC(3y)11.87%
ROIC(5y)9.52%
ROICexc(3y)12.93%
ROICexc(5y)10.52%
ROICexgc(3y)13.1%
ROICexgc(5y)10.69%
ROCE(3y)15.55%
ROCE(5y)12.47%
ROICexcg growth 3Y19.82%
ROICexcg growth 5Y9.24%
ROICexc growth 3Y20.17%
ROICexc growth 5Y9.43%
OM growth 3Y13.14%
OM growth 5Y8.2%
PM growth 3Y9.06%
PM growth 5Y19.66%
GM growth 3Y3.92%
GM growth 5Y4.04%
F-Score6
Asset Turnover1.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 6.22 | ||
| Debt/EBITDA | 1.8 | ||
| Cap/Depr | 101.66% | ||
| Cap/Sales | 0.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 33.02% | ||
| Profit Quality | 36.38% | ||
| Current Ratio | 5.77 | ||
| Quick Ratio | 0.69 | ||
| Altman-Z | 4.4 |
F-Score6
WACC8.51%
ROIC/WACC1.41
Cap/Depr(3y)125.04%
Cap/Depr(5y)125.08%
Cap/Sales(3y)0.63%
Cap/Sales(5y)0.69%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1.83%
EPS 3Y31.02%
EPS 5Y20.25%
EPS Q2Q%13.33%
EPS Next Y20.96%
EPS Next 2Y14.25%
EPS Next 3Y12.8%
EPS Next 5YN/A
Revenue 1Y (TTM)20.9%
Revenue growth 3Y15.29%
Revenue growth 5Y7.11%
Sales Q2Q%10.43%
Revenue Next Year8.91%
Revenue Next 2Y7.68%
Revenue Next 3Y7.21%
Revenue Next 5YN/A
EBIT growth 1Y7.6%
EBIT growth 3Y30.44%
EBIT growth 5Y15.9%
EBIT Next Year26.04%
EBIT Next 3Y12.69%
EBIT Next 5YN/A
FCF growth 1Y315.69%
FCF growth 3Y54.88%
FCF growth 5Y37.37%
OCF growth 1Y482.59%
OCF growth 3Y51.61%
OCF growth 5Y37.35%