KB Home (KBH)
NYSEConsumer DiscretionaryResidential ConstructionSnapshot 2026-09-09
$49.73-0.94%
Close 2026-09-09 · 1-day change
NYSEConsumer DiscretionaryResidential ConstructionSnapshot 2026-09-09
Warn: Management is running behind on a stated commitment.
KB Home aims to grow home deliveries to 2,800 in Q3 2026. Revenue guidance targets $1.35 billion for Q3 2026. Profit margins are expected near 16.3% next quarter. The company actively repurchases stock, buying $75 million in Q2 2026.
Revenue and home deliveries fell 23% and 27% year-over-year in Q2 2026. SG&A costs rose to 12.7% of revenue, pressuring margins. The housing market remains difficult, risking further declines.
The market prices in about -5% revenue growth over the next year and values KB Home slightly above our fair value near $56. Our view aligns with the Street on modest declines and margin pressure, reflecting current housing market challenges.
Breaks if: Stock repurchases drop below $50 million in Q3 2026
Continue repurchasing common stock to return capital to shareholders and improve per-share metrics.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on home deliveries and revenue growth. The current thesis state is intact, but recent performance has shown fragility in execution quality.
The market currently prices KBH as cheap compared to its peers, with a slight expectations gap. This suggests that while there are concerns about execution, the stock is not overly penalized for its recent challenges.
Fundamentals may remain mixed given the recent strong financial performance, but risks persist. Management's focus on maintaining home deliveries and controlling expenses is crucial, especially as SG&A costs have risen.
The thesis hinges on several factors, including management's ability to meet guidance, sector performance from competitors, and the impact of inflation on consumer spending. Monitoring these elements will be key for future performance.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. Analysts highlighted weaker demand due to declining backlog trends. This suggests future revenue visibility may weaken. However, the company has plans to attract first-time buyers, which could support growth.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 2 of last 2 quarters. The Company repurchased $50 million of common stock in 2026-Q1 and $75 million in 2026-Q2, totaling $125 million in the first half of 2026. Management is actively executing the repurchase program, delivering on this capital allocation priority.
“In the 2026 second quarter, the Company repurchased 1.4 million shares at a cost of $75.0 million.”
“In the 2026 first quarter, the Company repurchased approximately 0.8 million shares at a cost of $50.0 million.”
Breaks if: gross margin falls below 15.0% next quarter
Breaks if: revenue falls below $1.20 billion in Q3 2026
Focus on increasing home deliveries and revenues through operational execution and market positioning.
Stated as a priority in 2 of last 2 quarters. Revenues declined from $1.53B in 2025-Q2 to $1.11B in 2026-Q2 (-27%), and homes delivered decreased 23% to 2,395 in 2026-Q2. Net orders grew 3% in 2026-Q1. Management emphasizes operational execution and Built to Order model momentum, but financials show mixed delivery and revenue trends, indicating limited progress.
“Our return to a predominantly Built to Order business model continued to gain momentum, with these homes representing 73% of our net orders in the quarter.”
“We generated year-over-year net order growth in our first quarter and are achieving our targeted mix of Built to Order net orders.”
Breaks if: SG&A remains above 12.5% of revenue next quarter
Control SG&A expenses as a percentage of revenues to improve operating leverage and profitability.
Stated as a priority in 2 of last 2 quarters. SG&A expenses increased to 12.7% of revenues in 2026-Q2 from 10.7% prior year, and were 12.2% in 2026-Q1 versus 11.0% prior year, reflecting decreased operating leverage. Management emphasizes cost discipline, but SG&A as a percentage of revenue is rising, indicating limited progress in cost control.
“Selling, general and administrative expenses were 12.7% of housing revenues, compared to 10.7%.”
“Selling, general and administrative expenses were 12.2% of housing revenues, compared to 11.0%.”
Over the next 1 to 3 years, KBH's trajectory will depend on execution and external economic conditions. Not investment advice.