KB Home (KBH) has reported disappointing third-quarter 2021 results. The company engages in selling and building a variety of new homes.
Earnings during the quarter came in at $1.60 per share, lagging consensus estimates of $1.62 per share. The company had posted earnings of $0.83 per share in the same quarter last year.
Revenues of $1.47 billion missed analysts’ estimates of $1.57 billion but jumped 47% from the year-ago period. Notably, the number of homes delivered during the quarter grew 35% from last year to 3,425 units.
Also, net order value rose 22% to $2.01 billion due to a 26% rise in the overall average selling price of net orders to $491,800, partly offset by a 3% decrease in net orders to 4,085. (See KB Home stock chart on TipRanks)
The Chairman, President and CEO of KB Home, Jeffrey Mezger, said, “Looking ahead to 2022, we anticipate another year of profitable growth. With a sizable increase in our backlog value and projected increases in community count and margins, we expect a meaningful expansion of our return on equity that will be further enhanced by the $188 million we returned to stockholders through recent share repurchases.”
Two months ago, Seaport Global analyst Mark Weintraub upgraded his rating on the stock to Buy from Hold with a price target of $50. This implies 22.2% upside potential from current levels.
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 3 Buys and 2 Holds. The average KB Home price target of $53.50 implies 30.8% upside potential from current levels.
KBH scores a 6 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.
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