AIG earnings beat by $0.50, revenue topped estimates
Investing.com - UBS has reiterated its Buy rating on KB Home (NYSE:KBH) with a price target of $83.00, highlighting the homebuilder’s stable performance despite market challenges. According to InvestingPro data, KB Home currently trades at an attractive P/E ratio of 8.85, suggesting potential upside based on the company’s Fair Value assessment. The stock maintains a "GOOD" financial health rating, with 12 key ProTips available for subscribers analyzing the company’s prospects.
KB Home achieved an absorption pace of 3.8 in the fiscal third quarter, with the company noting that early September performance was similar to July and August, which were only modestly below June levels. The homebuilder reported market stabilization in Florida and Texas during the quarter, with Florida showing higher quarter-over-quarter absorption rates and price increases in certain communities. While InvestingPro data indicates an expected 11% revenue decline for fiscal 2025, the company maintains strong liquidity with a current ratio of 5.75, providing financial flexibility to navigate market conditions.
Approximately 70% of KB Home communities experienced steady or increased prices in the fiscal third quarter, representing the strongest quarterly pricing performance year-to-date, while price reductions were implemented in about 30% of communities. The company also reported that the magnitude of price reductions in the third quarter was lower than in the first and second quarters.
KB Home plans to shift its mix from approximately 50% build-to-order today to around 70% over time, with many communities opening in the second half of fiscal 2025 and fiscal 2026 focused on this strategy. The company raised its fiscal 2025 community count outlook from 250 to 260, primarily due to fewer than expected community close-outs. For detailed analysis of KB Home’s strategic initiatives and financial outlook, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.
The homebuilder reduced direct costs on fiscal third quarter housing starts by 2% quarter-over-quarter and 3% year-over-year, driven by lower lumber and labor costs, while also cutting build times to approximately 130 calendar days, down 10 days from the previous quarter, with a target of reaching 120 calendar days in the first half of fiscal 2026.
In other recent news, KB Home reported its financial results for the third quarter of 2025, exceeding Wall Street expectations. The homebuilder achieved an earnings per share (EPS) of $1.61, surpassing the forecasted $1.50. Revenue for the quarter reached $1.62 billion, slightly higher than the anticipated $1.59 billion. RBC Capital has adjusted its price target for KB Home, raising it to $59 from the previous $58, while maintaining a Sector Perform rating. This adjustment comes despite the firm lowering its projections for orders and homebuilding revenue, but they noted a 3% increase in their fiscal year 2026 EPS estimate for the company. These developments highlight the mixed outlook for KB Home, with strong current earnings but cautious future projections.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.