KB Home Story

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KBH -- USA Stock  

USD 37.62  1.06  2.90%

KB Home is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 22nd of September 2020. KB Home Average Equity is most likely to increase significantly in the upcoming years. The last year's value of Average Equity was reported at 2.58 Billion. The current Free Cash Flow is estimated to increase to about 268.5 M, while Net Income Per Employee is projected to decrease to roughly 91.8 K. While some of us are becoming more enthusiastic about consumer cyclical space, let's concentrate on KB Home in greater detail to make a better estimate of its debt utilization. What exactly are KB Home shareholders getting in October?
Published over a month ago
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How much will KB Home owe in October?
KB Home has 1.8 B in debt with debt to equity (D/E) ratio of 0.72, which is OK given its current industry classification. The entity has a current ratio of 6.57, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Earning per share calculations of KB Home is based on official Zacks consensus of 6 analysts regarding KB Home's future annual earnings. Given the historical accuracy of 90.28%, the future earnings per share of the company is estimated to be 2.665 with the lowest and highest values of 2.4 and 3.02, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.
KB Home financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of KB Home, including all of KB Home's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of KB Home assets, the company is considered highly leveraged. Understanding the composition and structure of overall KB Home debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

How important is KB Home's Liquidity

KB Home financial leverage refers to using borrowed capital as a funding source to finance KB Home ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. KB Home financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between KB Home's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for KB Home, but it might be worth checking our own buy vs. sell analysis

Exercise or conversion by Jeffrey Mezger of 117170 shares of KB Home subject to Rule 16b-3

Legal trades by KB Home insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
KB Home insider trading alert for exercise of non-qualified stock options (right to buy) by Jeffrey Mezger, President and CEO, on 23rd of October 2020. This event was filed by Kb Home with SEC on 2020-10-23. Statement of changes in beneficial ownership - SEC Form 4. Jeffrey Mezger currently serves as chairman of the board, president, chief executive officer of KB Home [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper look at KB Home

The current bullish price patterns experienced by current KB Home shareholders may raise some interest from stockholders. The stock closed today at a share price of 38.99 on 2,027,870 in trading volume. The company directors and management have been very successful in rebalancing the entity assets at opportune times to take advantage of market volatility in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.16. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from KB Home partners.

Asset Breakdown

Tax Assets
3.6 B
Current Assets
Total Assets5.4 Billion
Current Assets3.58 Billion
Tax Assets438.36 Million

KB Home showing occurrence of lower volatility

Kurtosis is down to 2.22. It may hint to a possible volatility drop. KB Home shows above-average downside volatility for the selected time horizon. We advise investors to inspect KB Home further and ensure that all market timing and asset allocation strategies are consistent with the estimation of KB Home future alpha.

Our Conclusion on KB Home

While few other entities under the residential construction industry are still a bit expensive, KB Home may offer a potential longer-term growth to stockholders. With a less-than optimistic outlook for your 30 days horizon, it may be a good time to quit some or all of your KB Home holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to KB Home.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of KB Home. Please refer to our Terms of Use for any information regarding our disclosure principles.

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