After the market close on Wednesday, KB Home reported earnings of 14 cents per share, higher than Wall Street's forecasts for 11 cents per share. Revenue of $678.37 million beat analysts' forecasts for $637.3 million.
During the company's conference call, KB Home reported labor constraints and higher costs of goods, which could support the Federal Reserve raising interest rates, TheStreet'sAction Alerts PLUS Portfolio Manager Jim Cramer says in the above video.
"If the Fed hears it. they're going to say, 'tighten, tighten, tighten,'" he said. "If the Fed is going to raise, it wrecks the KB theory, it wrecks the dollar theory, it wrecks the oil theory."
Additionally, the company is worth more than it's selling for, which makes it a takeover target for competitors such as Lennar Corp. (LEN), Cramer added.
Cramer also wrote a Real Money article today about KB's quarterly results and conference call.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rates this stock as a "hold" with a ratings score of C. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
You can view the full analysis from the report here: KBH