Home Sectors Consumer Cyclical Recent Valuation: KB Home (NYSE: KBH)

Recent Valuation: KB Home (NYSE: KBH)


KB Home is in the homebuilding and construction industry and consumer cyclical sector. The company CEO is Jeffrey T. Mezger. KB Home is engaged in the residential construction market. The Company’s offers a variety of new homes, move-up and active adult homebuyers, including attached and detached single-family residential homes.

Previous Intraday Trading Performance:

The KBH stock showed a previous change of -3.95% with an open at 23.20 and a close of 22.36. It reached an intraday high of 23.35 and a low of 22.34.

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The stock has a market cap of $2.0b with 87.7m shares outstanding, of which the float is 84.7m shares. Trading volume reached 2,177,199 shares compared to its average volume of 2,457,574 shares. Based on the current average volume and close price, the trading liquidity is good.

Historical Trading Performance:

Over the last five trading days, KB Home shares returned -4.40% and in the past 30 trading days it returned -11.86%. Over three months, it changed -18.55%. In one year it has changed -14.73% and within that year its 52-week high was 38.80 and its 52-week low was 22.27. KBH stock is 0.40% above its 52 Week Low.

Our calculations show a 200 day moving average of 27.60 and a 50 day moving average of 24.42. Currently KBH stock is trading -18.98% below its 200 day moving average and may not be a good opportunity to buy as it may continue to trend down.

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The last annual fiscal EPS for the company was reported at 1.84 that ended on 30th of November 2017, which according to the previous close, that is a PE of 12.15. Based on 7 analyst estimates, the consensus EPS for the next quarter is 0.78. The TTM EPS is 2.68, which comes to a TTM PE of 8.34.

The following are the last four quarter reported earnings per share:
08-31-2018:  0.87
05-31-2018:  0.57
02-28-2018:  0.40
11-30-2017:  0.84

The dividend per share is currently 0.10, which is a dividend yield of 0.45%. Also, the payout ratio is 3.73%, therefore the dividend is safe according to our calculations.

Base on our calculations, the intrinsic value per share is 50.04, which means it is possibly undervalued and has a margin of safety of 55.31%

Indicators to Watch:

Based on the latest filings, there is 90.90% of institutional ownership. Short-interest is 6,264,011, which is 7.14% of shares outstanding. The short-interest ratio or days-to-cover ratio is 5.00. This stock has a moderate level of short interest, but may still be a buying opportunity depending on other indicators.

The current calculated beta is 1.45

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Fundamental Indicators:

Based on last reported financials, the company’s return on equity is 8.30%, return on assets is 3.18%, profit margin is 3.52%, price-to-sales is 0.44 and price-to-book is 1.07.

Company Scores:

All scores are out of six:
 6  :Valuation Score
 3  :Past Performance Score
 5  :Financial Strength Score
 4  :Future Growth Score
 0  :Dividend Score
 4  :Overall Score

John Jones
Worked for several Wall Street firms: Salomon Smith Barney, UBS, and Charles Schwab. Has developed skills and gained extensive experience over the years that is used today to uncover winning penny stocks.Also was an attorney for small businesses in Scottsdale, Arizona. That experience and understanding of law provides a unique perspective and edge in discovering quality companies in various industries.