September 14, 2023
Top 10 Stock KB Home Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: KB Home – Top 10 Stock in Customer Satisfaction Leaders in the United States
KB Home is listed as a top 10 stock on September 14, 2023 in the market index Customer Focus US because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 71 (high 71% performer), Obermatt assesses an overall buy recommendation for KB Home on September 14, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Homebuilding |
| Index | Customer Focus US, Dividends USA, S&P MIDCAP |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View KB Home Buy
| 360 METRICS | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 99 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 61 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 64 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 59 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 71 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 71 (better than 71% compared with alternatives), overall professional sentiment and financial characteristics for the stock KB Home are above average. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for KB Home. The consolidated Value Rank has an attractive rank of 99, which means that the share price of KB Home is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 99% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 64. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 59. ...read more
RECOMMENDATION: With a consolidated 360° View of 71, KB Home is better positioned than 71% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 99), above-average growth (Growth Rank of 61), safe financing practices (Safety Rank of 64), and a positive market sentiment in the professional investor community (Sentiment Rank of 59), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of KB Home is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for KB Home positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock KB Home is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for KB Home. Analyst Opinions are at a rank of 22 (worse than 78% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 55, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in KB Home. Even better, the Professional Investors rank is 77, meaning that professional investors hold more stock in this company than in 77% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 56, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 56% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), KB Home has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: KB Home Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 99 (better than 99% compared with alternatives) for 2022, KB Home shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for KB Home. Price-to-Sales is 80 which means that the stock price compared with what market professionals expect for future sales is lower than for 80% of comparable companies, indicating a good value for KB Home's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 82% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 68. Compared with other companies in the same industry, dividend yields of KB Home are expected to be higher than for 87% of all competitors (a Dividend Yield rank of 87). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 99, is a buy recommendation based on KB Home's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in KB Home based on its detailed value metrics.
Growth Strategy: KB Home Growth Momentum good
| GROWTH METRICS | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 43 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 27 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 72 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 85 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 61 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), KB Home shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for KB Home. Capital Growth has a rank of 72, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 85 (above 85% of alternative investments). But Sales Growth has only a rank of 43, which means that, currently, professionals expect the company to grow less than 57% of its competitors, and Profit Growth is also low at a rank of 27. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for KB Home, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: KB Home Debt Financing Safety above-average
| SAFETY METRICS | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 42 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 93 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 55 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 64 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company KB Home has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of KB Home is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for KB Home. Refinancing is at 93, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 93% of its competitors. Liquidity is also good at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 42, which means the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), KB Home has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and KB Home could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: KB Home Above-Average Financial Performance
| COMBINED PERFORMANCE | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 99 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 61 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 55 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 73 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), KB Home (Homebuilding, USA) shares have above-average financial characteristics compared with similar stocks. Shares of KB Home are a good value (attractively priced) with a consolidated Value Rank of 99 (better than 99% of alternatives), show above-average growth (Growth Rank of 61), and are safely financed (Safety Rank of 64), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on KB Home's financial characteristics. As the company KB Home's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 99), above-average growth (Obermatt Growth Rank of 61), and indicate that the company is safely financed (Obermatt Safety Rank of 64), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of KB Home. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.