Is KB Home (KBH) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is KB Home (KBH). KBH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 6.08, while its industry has an average P/E of 7.63. KBH's Forward P/E has been as high as 12.05 and as low as 5.85, with a median of 8.10, all within the past year.
KBH is also sporting a PEG ratio of 0.38. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. KBH's industry currently sports an average PEG of 0.71. Within the past year, KBH's PEG has been as high as 1.28 and as low as 0.33, with a median of 0.45.
Another notable valuation metric for KBH is its P/B ratio of 1.32. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. KBH's current P/B looks attractive when compared to its industry's average P/B of 1.60. Within the past 52 weeks, KBH's P/B has been as high as 1.71 and as low as 1.07, with a median of 1.36.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KBH has a P/S ratio of 0.82. This compares to its industry's average P/S of 0.84.
These are just a handful of the figures considered in KB Home's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KBH is an impressive value stock right now.
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