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KB Home (KBH) Suffers a Larger Drop Than the General Market: Key Insights

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In the latest trading session, KB Home (KBH - Free Report) closed at $83.16, marking a -0.79% move from the previous day. The stock's change was less than the S&P 500's daily loss of 0.6%. At the same time, the Dow lost 0.39%, and the tech-heavy Nasdaq lost 1.12%.

The homebuilder's stock has dropped by 2.26% in the past month, falling short of the Construction sector's gain of 0.8% and the S&P 500's gain of 3.15%.

The investment community will be closely monitoring the performance of KB Home in its forthcoming earnings report. On that day, KB Home is projected to report earnings of $2.04 per share, which would represent year-over-year growth of 13.33%. Our most recent consensus estimate is calling for quarterly revenue of $1.73 billion, up 8.88% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $8.38 per share and a revenue of $6.84 billion, demonstrating changes of +19.2% and +6.68%, respectively, from the preceding year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for KB Home. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. KB Home presently features a Zacks Rank of #2 (Buy).

From a valuation perspective, KB Home is currently exchanging hands at a Forward P/E ratio of 10. This indicates a premium in contrast to its industry's Forward P/E of 9.85.

Also, we should mention that KBH has a PEG ratio of 0.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Building Products - Home Builders industry had an average PEG ratio of 0.98 as trading concluded yesterday.

The Building Products - Home Builders industry is part of the Construction sector. With its current Zacks Industry Rank of 15, this industry ranks in the top 6% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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