KB Home (NYSE:KBH) Just Missed Earnings: Here's What Analysts Think Will Happen Next

As you might know, KB Home (NYSE:KBH) last week released its latest first-quarter, and things did not turn out so great for shareholders. KB Home missed analyst forecasts, with revenues of US$1.4b and statutory earnings per share (EPS) of US$1.49, falling short by 7.2% and 6.1% respectively. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on KB Home after the latest results.

After the latest results, the consensus from KB Home's eleven analysts is for revenues of US$6.67b in 2025, which would reflect a discernible 2.7% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to drop 18% to US$7.12 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.04b and earnings per share (EPS) of US$8.30 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

See our latest analysis for KB Home

The consensus price target fell 9.8% to US$67.54, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on KB Home, with the most bullish analyst valuing it at US$86.00 and the most bearish at US$56.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.6% by the end of 2025. This indicates a significant reduction from annual growth of 9.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% per year. It's pretty clear that KB Home's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for KB Home. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple KB Home analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for KB Home that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.