Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

KB Home Receives Wall Street Praise Following Strong Q2, Backlog

Stock Markets Jun 23, 2022 06:48
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Staff

KB Home (NYSE:KBH) shares were trading more than 3% higher in pre-open trading Thursday following the homebuilder's better-than-expected Q2 earnings results, which Wall Street analysts praised.

The company posted EPS of $2.32, well ahead of the consensus estimate of $2.00. Revenue grew 19% year-over-year to $1.72 billion, beating the consensus estimate of $1.61 billion.

Ending backlog value increased 43% year-over-year to $6.12 billion, which represents the highest ever second-quarter level. Net order value increased 4% year-over-year to $2.12 billion, with net orders of 3,914 decreasing 9% year-over-year.

The builder is reaffirming fiscal 2022 guidance, although CEO Jeffrey Mezger said: "Sales rates are moderating from the exceptional levels the industry has experienced, as buyers process the impact of higher mortgage interest rates, as well as inflationary pressures."

Mezger believes the company is well-positioned to navigate these changing market conditions due to the flexibility of its Built-to-Order business model.

Following the results, several Wall Street analysts were out positive about the stock.

Evercore ISI analyst Stephen Kim raised the price target to $50 from $46 and reiterated his Outperform rating. Kim said the strong order prices and backlog protection bode well for margins.

"While margins were largely in-line with expectations and the midpoint of guidance was maintained, the strong order price growth ($543k, up 6% q/q and 15% y/y) projects positively for its margin profile in early 2022, as it continues to build on pre-pandemic land," the analyst commented. He adjusted FY22 and FY23 EPS estimates to $10.01 (from $9.49) and $11.27 (from $11.26), respectively.

Meanwhile, Credit Suisse (SIX:CSGN) analyst Dan Oppenheim is increasing 2022 estimates while lowering 2023. However, he views the stock as attractive at a 30% discount to book value. The analyst reiterated an Outperform rating and $42 price target.

"We are slightly increasing our 2022 EPS estimate to $9.90 (from $9.80), but lowering our 2023 EPS estimate more meaningfully to $11.25 (from $12.43)," Oppenheim commented. "Despite the lower 2023 estimate, we believe the stock offers upside at a 30% discount to 2Q/22 book value and a 37% discount to 2022E book value."


KB Home Receives Wall Street Praise Following Strong Q2, Backlog

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email