KB Home Earnings Preview

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KB Home (NYS: KBH) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday. KB Home constructs and sells homes through its operating divisions across the United States under the name KB Home. It operates a homebuilding and financial services business serving homebuyers in markets nationwide.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on KB Home with 11 of 17 analysts rating it hold. Analysts don't like KB Home as much as competitor Standard Pacific overall. Five out of eight analysts rate Standard Pacific a buy compared to five of 17 for KB Home. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $469.6 million in revenue this quarter. That would represent a rise of 4.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.04 per share. Estimates range from a loss of $0.06 to a profit of $0.16.

What our community says:
Most CAPS All-Stars are skeptical of KBH prospects, with 65.4% granting it an underperform rating. The community is divided on the stock with 46.2% Fools giving it an outperform rating and 53.8% an underperform rating. Fools are bearish on KB Home and haven't been shy with their opinions lately, logging 654 posts in the past 30 days. KB Home's bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

17.3%

7.6%

13.3%

19.5%

Operating Margin

0.9%

(20.8%)

(23.9%)

7.0%

Net Margin

(2.6%)

(25.2%)

(58.2%)

3.9%

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Earnings estimates provided by Zacks

At the time this article was published

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