Update shared on 08 Nov 2025
Analysts have raised their price targets on KB Home, with increases ranging from $1 to $10 per share. They cite the company's resilient earnings, disciplined operating strategies, and signs of stabilization in the housing market despite ongoing near-term challenges.
Analyst Commentary
Recent analyst research on KB Home highlights a mix of optimism regarding the company's operational performance and caution around near-term market dynamics. Adjustments to price targets reflect both the positive momentum in earnings and lingering concerns about demand and sector challenges.
Bullish Takeaways- Bullish analysts point to KB Home's disciplined operating strategies and adaptability in a challenging market. These approaches have helped deliver earnings results that exceeded expectations.
- There is growing confidence that a bottom may be forming in the housing market. Improved quarterly performance is seen as a sign of potential stabilization.
- Cost control measures, including aggressive fixed cost reductions and share buybacks, are viewed as supportive of higher future earnings. These measures have led to upward revisions in price targets.
- Recent valuation re-ratings across the homebuilding sector point to greater investor openness to forward-looking optimism, particularly regarding interest rates and sector recovery potential.
- Bearish analysts remain cautious about tepid near-term demand and suggest that order and revenue growth may lag even as cost discipline improves margins.
- Some expect that even with positive earnings surprises, headwinds from housing market uncertainty and macroeconomic factors could limit near-term upside.
- Price target increases are sometimes coupled with neutral or underweight ratings. This indicates lingering concerns about volatility and sector risks.
What's in the News
- President Donald Trump urged Fannie Mae and Freddie Mac to energize homebuilders, including KB Home, by addressing what he claims is a record inventory of 2 million empty lots (Reuters).
- KB Home announced the opening of several new residential communities in California and Arizona. These communities offer a range of floor plans, ENERGY STAR certified homes, and modern amenities for buyers.
- The company launched a $1 billion share repurchase program. As of August 31, 2025, 16.32% of shares had been repurchased, totaling $738.49 million.
- KB Home provided fiscal guidance, expecting quarterly housing revenues between $1.6 and $1.7 billion, and full-year revenues between $6.1 and $6.2 billion for 2025.
Valuation Changes
- The discount rate has risen slightly from 9.52% to 9.77%, reflecting a modest increase in risk assumptions.
- Revenue growth projections have declined from -4.21% to -4.39%, indicating a slightly more negative outlook for sales expansion.
- Net profit margin has improved marginally from 6.70% to 6.74%, suggesting a small strengthening in anticipated profitability.
- Future P/E has increased slightly from 11.47x to 11.55x, implying a modestly higher valuation relative to forecasted earnings.
- Fair value remains stable at $64.67, showing no change in the fundamental valuation estimate.
Disclaimer
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