KB Home (NYSE:KBH) was downgraded by Zacks Investment Research from a “hold” rating to a “strong sell” rating in a research report issued on Monday.

According to Zacks, “KB Home reported dismal fourth quarter of fiscal 2018. Although earnings topped the Zacks Consensus Estimate, revenues missed the same. Also, revenues declined 4% year over year, mainly due to lower average selling price (“ASP”) of homes delivered. Particularly in the Homebuilding segment, housing and land revenues fell 3.7% and 40.7%, respectively. Moreover, net orders decreased 12.3%, declining across the regions served by the company (barring Southeast region). Notably, its backlogs were also down 6.9% from a year ago. The downside mainly stemmed from adverse timing of community openings. Also, rising labor costs and land prices are pressurizing KB Home’s growth prospective, as they limit homebuilders’ pricing power. Homebuilding operating margin, excluding inventory-related charges, contracted 20 bps in the reported quarter. Meanwhile, shares of KB Home have underperformed its industry in the past three months.”

KBH has been the subject of a number of other research reports. JMP Securities reiterated a “market perform” rating on shares of KB Home in a research report on Thursday, September 27th. ValuEngine downgraded shares of KB Home from a “sell” rating to a “strong sell” rating in a research report on Thursday, October 4th. Credit Suisse Group restated a “sell” rating and set a $17.00 price target on shares of KB Home in a research report on Thursday. Royal Bank of Canada set a $23.00 price target on shares of KB Home and gave the stock a “hold” rating in a research report on Thursday, November 15th. Finally, MKM Partners set a $32.00 price target on shares of KB Home and gave the stock a “hold” rating in a research report on Wednesday, September 26th. Four investment analysts have rated the stock with a sell rating, ten have assigned a hold rating and six have issued a buy rating to the stock. The company has an average rating of “Hold” and an average price target of $26.78.

Shares of KB Home stock opened at $21.17 on Monday. The stock has a market capitalization of $1.94 billion, a price-to-earnings ratio of 7.51, a PEG ratio of 0.47 and a beta of 1.46. KB Home has a fifty-two week low of $16.82 and a fifty-two week high of $38.16.

KB Home (NYSE:KBH) last issued its quarterly earnings data on Wednesday, January 9th. The construction company reported $0.96 earnings per share for the quarter, topping analysts’ consensus estimates of $0.93 by $0.03. The business had revenue of $1.35 billion during the quarter, compared to the consensus estimate of $1.33 billion. KB Home had a net margin of 3.75% and a return on equity of 14.61%. The company’s revenue was down 3.8% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $0.84 earnings per share. Sell-side analysts expect that KB Home will post 3.02 EPS for the current year.

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Renaissance Technologies LLC raised its holdings in KB Home by 48.8% in the 2nd quarter. Renaissance Technologies LLC now owns 1,169,100 shares of the construction company’s stock valued at $31,846,000 after acquiring an additional 383,200 shares during the last quarter. Oregon Public Employees Retirement Fund acquired a new stake in KB Home in the 2nd quarter valued at about $897,000. OppenheimerFunds Inc. raised its holdings in KB Home by 5.0% in the 2nd quarter. OppenheimerFunds Inc. now owns 48,051 shares of the construction company’s stock valued at $1,309,000 after acquiring an additional 2,298 shares during the last quarter. Laurion Capital Management LP acquired a new stake in KB Home in the 2nd quarter valued at about $361,000. Finally, Voya Investment Management LLC raised its holdings in KB Home by 10.0% in the 2nd quarter. Voya Investment Management LLC now owns 266,046 shares of the construction company’s stock valued at $7,247,000 after acquiring an additional 24,259 shares during the last quarter. Hedge funds and other institutional investors own 86.39% of the company’s stock.

KB Home Company Profile

KB Home operates as a homebuilding company in the United States. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, and active adult homebuyers. The company also provides property and casualty insurance, as well as earthquake, flood, and personal property insurance to its homebuyers; title services; and mortgage banking services, including residential mortgage loan originations to its homebuyers.

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