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LOS ANGELES - Homebuilder KB Home (NYSE:KBH), currently trading at $63.11 with a market capitalization of $4.1 billion, announced Monday that its Board of Directors has authorized a new $1 billion share repurchase program, replacing its previous authorization. According to InvestingPro analysis, the company appears undervalued at current market levels.
The company's Chairman and Chief Executive Officer Jeffrey Mezger indicated that the authorization will allow KB Home to continue its "balanced approach to capital allocation" while investing in future growth and returning capital to stockholders. This approach includes maintaining a 1.62% dividend yield, with the company having maintained dividend payments for 40 consecutive years.
Since initiating its repurchase program in 2021, KB Home has bought back over $1.5 billion of its shares, representing more than 34% of its outstanding shares. According to the company, this represents the highest percentage of market capitalization repurchased among its industry peers.
The homebuilder, which operates in 49 markets across the United States, cited its confidence in generating significant operating cash flows and maintaining a solid balance sheet as factors supporting the new buyback program.
KB Home, which has built nearly 700,000 homes in its more than 65-year history, stated that it considers its shares undervalued at current market levels.
The announcement was made in a press release statement from the company, which did not specify a timeframe for completing the repurchase program.
In other recent news, KB Home reported its third-quarter 2025 financial results, exceeding Wall Street expectations with an earnings per share (EPS) of $1.61, surpassing the forecasted $1.50. The company's revenue reached $1.62 billion, slightly above the anticipated $1.59 billion. Additionally, KB Home's board of directors declared a quarterly cash dividend of $0.25 per share, payable on November 26, 2025, to stockholders of record as of November 13, 2025. UBS has reiterated its Buy rating on KB Home, setting a price target of $83, highlighting the company's stable performance despite market challenges. RBC Capital also adjusted its price target for KB Home to $59 from $58, maintaining a Sector Perform rating, and noted a 3% increase in its fiscal year 2026 earnings per share estimate. Furthermore, KB Home announced that its management development and compensation committee approved performance-based restricted stock units for its executive officers. These awards will be based on performance criteria over a three-year period starting December 1, 2025.
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