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1. Company Snapshot

1.a. Company Description

KB Home operates as a homebuilding company in the United States.It operates through four segments: West Coast, Southwest, Central, and Southeast.It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers.


The company also offers financial services, such as insurance products and title services.It has operations in Arizona, California, Colorado, Florida, Nevada, North Carolina, Texas, and Washington.The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001.


KB Home was founded in 1957 and is headquartered in Los Angeles, California.

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1.b. Last Insights on KBH

KB Home's recent performance was negatively impacted by weak demand, affordability pressures, and high mortgage rates, leading to flat EPS estimates, declining revenues, margins, and backlog. The company's Q4 earnings beat estimates but still declined year-over-year. Institutional investors, such as Fisher Asset Management LLC, reduced their holdings, while others like SG Americas Securities LLC increased theirs. Analysts have a "Hold" rating on the stock, with some cutting their forecasts. KB Home's high mortgage rates and affordability issues are key concerns.

1.c. Company Highlights

2. KB Home's Q4 2025 Earnings: A Review of Financial Performance and Outlook

KB Home reported total revenues of $1.69 billion for Q4 2025, with housing revenues decreasing by 15% to $1.68 billion. The company delivered 3,619 homes at an average selling price (ASP) of $466,000, down 7% year-over-year. The housing gross profit margin was 17%, and the adjusted housing gross profit margin was 17.8%. For the full year, total revenues were $6.2 billion, with net income of nearly $430 million. The company's earnings per share (EPS) for Q4 2025 was $1.92, beating estimates of $1.79. The company's financial performance was characterized by a decline in housing revenues, but it maintained a healthy gross margin.

Publication Date: Jan -11

📋 Highlights
  • Q4 Revenue & Housing Revenues:: Total revenues $1.69 billion, housing revenues down 15% to $1.68 billion despite 3,619 home deliveries.
  • 2026 Guidance:: Housing revenues projected $1.05–$1.15 billion, with adjusted gross profit margin of 15.4%–16% and 2,300–2,500 home deliveries.
  • Share Repurchases:: $115 million returned to shareholders in Q4, including 1.6M shares repurchased; $900 million remaining under new $1B buyback authorization.
  • Land Investment & Inventory:: $665 million spent on land in Q4; 65,000 lots (43% controlled) and $5.7 billion in inventory support future growth.

Operational Highlights

The company delivered 3,619 homes in Q4 2025, with a significant proportion being built-to-order (BTO) sales, which accounted for 57% of total deliveries. The company is focused on driving BTO sales, with a goal of at least four BTO sales per community per month, as it believes this approach provides better returns and allows for more control over margins. The company's lot position includes 65,000 lots, 43% of which are controlled.

Guidance and Outlook

For 2026, KB Home expects housing revenues between $5.1 billion and $6.1 billion, based on 11,000 to 12,500 deliveries. The company forecasts a housing gross profit margin of 15.4% to 16%. The guidance implies an ASP above the fourth-quarter 2025 ASP, driven by a mix shift towards higher-priced communities. Analysts estimate next year's revenue growth at 6.5%.

Valuation and Return to Shareholders

The company's current valuation metrics are as follows: P/E Ratio of 9.16, P/B Ratio of 0.85, and ROE of 10.32%. The company has a strong balance sheet, enabling a healthy dividend and share repurchases. In Q4 2025, the company repurchased 1.6 million shares for $100 million. For 2026, the company expects to repurchase $50 million to $100 million of its common stock in the first quarter, and plans to continue its share buyback program at a similar rate in subsequent quarters.

Margin Expectations and Risks

The company expects its first-quarter gross margin to decline due to regional and product mix within its cities, combined with pricing pressure on moving inventory. However, it anticipates the first quarter to be the bottom in margins and expects margins to improve throughout 2026. The company does not anticipate a significant change in construction or lot costs and has already taken a $14 million impairment charge.

3. NewsRoom

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KB HOME ANNOUNCES THE GRAND OPENING OF ITS NEWEST COMMUNITY IN ST. AUGUSTINE, FLORIDA

Feb -10

Source: prnewswire.com

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KB HOME ANNOUNCES THE GRAND OPENING OF ITS NEWEST GATED COMMUNITY IN A DESIRABLE RIVERSIDE, CALIFORNIA LOCATION

Feb -10

Source: prnewswire.com

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KB Home (KBH) Stock Dips While Market Gains: Key Facts

Feb -06

Source: zacks.com

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KB HOME ANNOUNCES THE GRAND OPENING OF ITS NEWEST COMMUNITY IN HIGHLY DESIRABLE ROCKLIN, CALIFORNIA

Feb -06

Source: prnewswire.com

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KB Home (NYSE:KBH) Receives Average Recommendation of “Hold” from Brokerages

Feb -06

Source: defenseworld.net

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Is the Options Market Predicting a Spike in KB Home Stock?

Feb -05

Source: zacks.com

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KB HOME ANNOUNCES A RARE OPPORTUNITY TO OWN A NEW HOME IN HIGHLY DESIRABLE FREMONT, CALIFORNIA

Feb -05

Source: prnewswire.com

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KB HOME ANNOUNCES THE GRAND OPENING OF ITS NEWEST TOWNHOME COMMUNITY IN HIGHLY DESIRABLE MARYSVILLE, WASHINGTON

Feb -05

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.62%)

6. Segments

Homebuilding - West Coast

Expected Growth: 9.5%

KB Home's 9.5% growth in West Coast homebuilding is driven by strong demand for new homes, fueled by low unemployment, rising wages, and limited housing supply. Additionally, the company's focus on first-time homebuyers, who account for 55% of sales, and its strategic land acquisition and development strategies have contributed to its growth in the region.

Homebuilding - Central

Expected Growth: 9.0%

KB Home's Central segment growth of 9.0% is driven by increasing demand for affordable housing, strategic land acquisition, and effective cost management. Additionally, the segment benefits from a strong economy, low unemployment, and favorable demographics in the region, leading to higher sales and revenue growth.

Homebuilding - Southwest

Expected Growth: 10.5%

Strong demand in the Southwest region, driven by job growth, low unemployment, and migration to affordable markets. KB Home's focus on first-time homebuyers and entry-level products resonates with the region's demographics. Additionally, the company's strategic land acquisition and development strategies have positioned it for success in this growing market.

Homebuilding - Southeast

Expected Growth: 10.0%

KB Home's Southeast homebuilding segment growth is driven by strong demand in Florida and the Carolinas, fueled by population growth, job creation, and migration to these regions. Additionally, the company's focus on first-time homebuyers and affordable pricing has resonated with customers, contributing to the 10.0% growth.

Financial Services

Expected Growth: 8.0%

KB Home's 8.0% growth in Financial Services is driven by increasing mortgage banking revenue, fueled by rising home sales and higher average selling prices. Additionally, the company's strategic partnerships with mortgage providers and its own mortgage banking operations contribute to the growth. Furthermore, KB Home's focus on providing a comprehensive homebuying experience, including title and insurance services, also supports the segment's expansion.

7. Detailed Products

Single-Family Homes

KB Home offers a wide range of single-family homes, from starter homes to luxury estates, designed to meet the needs of various lifestyles and budgets.

Townhomes

KB Home's townhomes offer a low-maintenance lifestyle with shared walls, perfect for those who want the benefits of homeownership without the upkeep of a single-family home.

Condominiums

KB Home's condominiums provide a carefree lifestyle with shared amenities and services, ideal for those who want to own their home without the burden of exterior maintenance.

Active Adult Communities

KB Home's active adult communities are designed for adults 55+, offering a resort-style lifestyle with amenities and services tailored to this demographic.

Urban Infill Communities

KB Home's urban infill communities offer new homes in established neighborhoods, close to urban centers, public transportation, and local amenities.

8. KB Home's Porter Forces

Forces Ranking

Threat Of Substitutes

KB Home faces moderate threat from substitutes, as customers have limited alternatives to traditional single-family homes. However, the rise of alternative housing options, such as apartments and condos, poses a moderate threat.

Bargaining Power Of Customers

KB Home's customers have low bargaining power due to the company's strong brand reputation and limited competition in the homebuilding industry.

Bargaining Power Of Suppliers

KB Home's suppliers, such as lumber and material providers, have moderate bargaining power due to the company's large scale of operations and diversified supplier base.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the homebuilding industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The homebuilding industry is highly competitive, with many established players competing for market share. KB Home faces intense rivalry from competitors such as Lennar, D.R. Horton, and PulteGroup.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.43%
Debt Cost 8.15%
Equity Weight 68.57%
Equity Cost 12.63%
WACC 11.22%
Leverage 45.83%

11. Quality Control: KB Home passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
M/I Homes

A-Score: 5.4/10

Value: 8.0

Growth: 8.2

Quality: 7.0

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Toll Brothers

A-Score: 5.4/10

Value: 6.9

Growth: 7.3

Quality: 6.6

Yield: 2.0

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Meritage Homes

A-Score: 5.4/10

Value: 8.6

Growth: 5.3

Quality: 6.5

Yield: 4.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Taylor Morrison

A-Score: 5.1/10

Value: 8.0

Growth: 5.7

Quality: 6.4

Yield: 0.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Century Communities

A-Score: 5.1/10

Value: 8.0

Growth: 7.6

Quality: 4.7

Yield: 3.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
KB Home

A-Score: 4.9/10

Value: 7.8

Growth: 4.6

Quality: 5.3

Yield: 3.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

63.51$

Current Price

63.51$

Potential

-0.00%

Expected Cash-Flows