KB Home (NYSE:KBH) Just Released Its Yearly Earnings: Here's What Analysts Think

Investors in KB Home (NYSE:KBH) had a good week, as its shares rose 4.5% to close at US$68.25 following the release of its yearly results. It was a credible result overall, with revenues of US$6.9b and statutory earnings per share of US$8.45 both in line with analyst estimates, showing that KB Home is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for KB Home

Taking into account the latest results, the current consensus from KB Home's ten analysts is for revenues of US$7.17b in 2025. This would reflect a credible 3.4% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 7.6% to US$8.38 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$7.34b and earnings per share (EPS) of US$8.79 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the US$77.71 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic KB Home analyst has a price target of US$97.00 per share, while the most pessimistic values it at US$60.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that KB Home's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 9.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that KB Home is also expected to grow slower than other industry participants.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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.

Even so, be aware that KB Home is showing 1 warning sign in our investment analysis , you should know about...

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.