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Are Investors Undervaluing KB Home (KBH) Right Now?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.57, while its industry has an average P/E of 10.64. KBH's Forward P/E has been as high as 10.11 and as low as 5.85, with a median of 8.43, all within the past year.
Investors should also note that KBH holds a PEG ratio of 0.62. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. KBH's industry has an average PEG of 0.77 right now. Over the last 12 months, KBH's PEG has been as high as 0.86 and as low as 0.61, with a median of 0.75.
Investors should also recognize that KBH has a P/B ratio of 1.44. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.79. Within the past 52 weeks, KBH's P/B has been as high as 1.65 and as low as 0.89, with a median of 1.32.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KBH has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.
Finally, investors should note that KBH has a P/CF ratio of 9.18. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. KBH's P/CF compares to its industry's average P/CF of 10.02. KBH's P/CF has been as high as 10.48 and as low as 5.14, with a median of 8.27, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that KB Home is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KBH feels like a great value stock at the moment.
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Are Investors Undervaluing KB Home (KBH) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is KB Home (KBH - Free Report) . KBH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.57, while its industry has an average P/E of 10.64. KBH's Forward P/E has been as high as 10.11 and as low as 5.85, with a median of 8.43, all within the past year.
Investors should also note that KBH holds a PEG ratio of 0.62. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. KBH's industry has an average PEG of 0.77 right now. Over the last 12 months, KBH's PEG has been as high as 0.86 and as low as 0.61, with a median of 0.75.
Investors should also recognize that KBH has a P/B ratio of 1.44. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.79. Within the past 52 weeks, KBH's P/B has been as high as 1.65 and as low as 0.89, with a median of 1.32.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KBH has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.
Finally, investors should note that KBH has a P/CF ratio of 9.18. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. KBH's P/CF compares to its industry's average P/CF of 10.02. KBH's P/CF has been as high as 10.48 and as low as 5.14, with a median of 8.27, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that KB Home is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KBH feels like a great value stock at the moment.