How Will KB Home (KBH) Stock React to Its Earnings Results?

NEW YORK (TheStreet) -- KB Home (KBH) is scheduled to release its third quarter 2014 earnings results before the market open on Wednesday, and analysts polled by FactSet are expecting the home builder to post earnings per share of 42 cents, compared to the 30 cents per share the company reported for the same period in 2013

Analysts have forecast KB Home will report revenue of $657 million for the latest quarter, compared to the $549 million the company said it earned in the 2013 third quarter.

Shares of KB Home are higher by 1.19% to $17.02 in early afternoon trading on Tuesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates KB HOME as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate KB HOME (KBH) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 7.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KB HOME reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KB HOME turned its bottom line around by earning $0.41 versus -$0.76 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $0.41).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 995.5% when compared to the same quarter one year prior, rising from -$2.97 million to $26.62 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Household Durables industry and the overall market, KB HOME's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: KBH Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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