Knowing facts before you bet on it

KB home (KBH) was recently on the list of the most sought -after stocks from Zacks.com. Therefore, you may want to take some of the key factors into account that could influence the performance of the share in the near future.

Last month, the shares of this home -like farmer returned -0.5% compared to the change in the Zack S&P 500 Composite. During this time, the Zacks Building Products – Home Builders Industry, which KB Home falls, lost 3.7%. The key question now is: What could be the future direction of the stock?

While media publications or rumors about a significant change in the business prospects of a company usually carry out its shares as a “trend” and lead to an immediate change in price, there are always some basic facts that ultimately dominate the purchase and hate decision finding.

Here at Zacks we prioritize the evaluation of the change in the projection of the future income of a company above all. This is because we believe that the current value of his future profit current determines the current value for its shares.

We essentially take a look at how analysts that cover the shares reveal their profit estimates in order to reflect the effects of the latest business trends. And if the profit estimates for a company rise, the current value for its shares increases. A higher atmosphere to be used than the current market price gives investors the interest for buying the share, which leads at a higher price. For this reason, empirical research shows a strong correlation between trends in the revisions of the yield estimate and short -term share price movements.

The KB house is expected to make a profit of 1.59 USD per share in the current quarter, which corresponds to a change of -26.1%compared to the previous year. In the past 30 days, the Zacks Consensus estimate has changed by -6.2%.

The consensus result estimate of $ 7.36 for the current financial year shows a change of -12.9%compared to the previous year. This estimate has changed by -3.3% in the past 30 days.

For the next financial year, the consensus estimate of $ 7.68 shows a change of +4.4% compared to what KB house is expected a year ago. The estimate has changed in the past month.

With an impressive external, tested success balance sheet is our proprietary stock assessment tool and the Zacks-rank-rank-a more cozy indicator for the short-term price-performance of a share, since it effectively uses the power of the profit assessment revisions. The size of the recent change in the consensus estimate and three other factors in connection with the profit estimates led to a Zacks rank 4 (sale) for KB house.

The following table shows the development of the company's 12-month consensus EPS EPS estimate:

12-month consensus EPS estimate for KBH _12monthepscharturl

While profit growth is probably the most superior indicator of a company's financial health, nothing happens than such if a company cannot increase its income. After all, it is almost impossible for a company to increase its income over a longer period of time without increasing its income. It is therefore important to know the potential sales growth of a company.

In the case of KB Home, the consensus sales of $ 1.58 billion show a change of -7.5%a year compared to the previous year. The estimates of 6.83 billion US dollars and $ 6.77 billion for the current and next financial years indicate changes in -1.4% or -0.9%.

KB Home reported sales of $ 1.39 billion in the last quarter, which corresponds to a change of -5.2%compared to the previous year. EPS of USD 1.49 for the same period comparable to USD 1.76 a year ago.

Compared to the Zacks Consensus estimate of 1.5 billion US dollars, the registered income is a surprise of -7.37%. The EPS surprise was -4.49%.

In the last four quarters, the KB house exceeded the consensus -EPS estimates twice. The company has achieved three times consensus sales estimates three times during this period.

Without taking into account the assessment of a share, no investment decision can be efficient. When predicting the future price performance of a share, it is crucial to determine whether the current price correctly reflects the internal value of the underlying business and the company's growth prospects.

The comparison of the current value of the valuation multipliers of a company, such as

The Zacks Value Style Score (part of the Zacks Style Scores Systems), which pays attention to the grade of stocks from A to F both traditional and unconventional valuation metrics (AA is better than a C; and so on) is rather helpful to identify whether a share is overrated, legally valued or temporarily accommodated.

The KB house is classified on this front A, which points out that it is about his colleagues with a discount. Click here to display the values of some evaluation metrics that have driven this grade.

The facts discussed here and a lot of other information about Zacks.com could help determine whether it is worth paying attention to the market for the KB house or not. However, his Zack's rank # 4 suggests that it affects the wider market below average at short notice.

Would you like the latest recommendations from Zack's Investment Research? Today you can download 7 best stocks for the next 30 days. Click here to receive this free report

KB Home (KBH): Free stock analysis report

This article was originally published in Zack's Investment Research (Zacks.com).

Zacks Investment Research

Leave a Comment Cancel reply