KB Home reports Q4 revenue decline amid market strength
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 25 2025
0mins
Source: Investing
KB Home's stock fell by 5.99% as it hit a 5-day low, reflecting ongoing challenges in the housing market.
This decline comes amid broader market strength, with the Nasdaq-100 up 0.76% and the S&P 500 up 0.20%. The company's fourth-quarter revenue of $1.69 billion represented a 10% decline year-over-year, driven by low consumer confidence and high mortgage rates, which have impacted home deliveries and overall performance. Despite these challenges, KB Home's commitment to shareholder returns and financial flexibility remains strong.
The implications of this revenue decline suggest that while the broader market is performing well, KB Home faces significant headwinds in the housing sector, which could affect its future growth and stock performance.
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Analyst Views on KBH
Wall Street analysts forecast KBH stock price to fall
9 Analyst Rating
2 Buy
6 Hold
1 Sell
Hold
Current: 60.720
Low
50.00
Averages
58.38
High
71.00
Current: 60.720
Low
50.00
Averages
58.38
High
71.00
About KBH
KB Home is a homebuilding company, which builds a variety of new homes, including attached and detached single-family residential homes, townhomes and condominiums, designed primarily for first-time and first move-up, as well as second move-up and active adult, homebuyers. It offers homes in development communities, at urban in-fill locations and as part of mixed-use projects. Its segments include homebuilding and financial services. The homebuilding segments is engaged in the acquisition and development of land primarily for residential purposes. The financial services reporting segment offers property and casualty insurance and, in certain instances, earthquakes, flood and personal property insurance to its homebuyers in the same markets as its homebuilding segments and provides title services in the majority of its markets. It offers mortgage banking services, including residential consumer mortgage loan originations, to its homebuyers indirectly through KBHS Home Loans, LLC.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
KB Home Shares Surge on New Built-to-Order Model
- Declining Deliveries: KB Home reported a 23% year-over-year drop in home deliveries to 2,395 units in Q2, reflecting the pressures of a sluggish housing market, which contributed to a 27% revenue plunge to $1.11 billion, indicating significant market challenges impacting performance.
- Net Income Decline: The company's net income fell sharply from $107.9 million a year ago to $27.3 million, with earnings per share dropping from $1.50 to $0.43, highlighting severe profitability challenges amid declining sales and delivery volumes.
- Advantages of New Model: CEO Rob McGibney emphasized that the shift to a built-to-order model provides certainty regarding key variables, allowing the company to lock in prices and costs after buyer commitment, thereby reducing exposure to rising material and labor costs, which is expected to enhance future profitability.
- Gross Margin Expectations: Management anticipates KB Home's full-year housing gross margin to rise to between 16.1% and 16.5%, up from 15.2% in Q2, indicating a positive outlook for higher delivery volumes and margins in the upcoming quarters, setting a solid foundation for fiscal 2026.
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- Declining Deliveries: KB Home reported a 23% year-over-year drop in home deliveries to 2,395 units in Q2, reflecting the ongoing pressure of high mortgage rates on the U.S. housing market, leading to a significant revenue decline.
- Revenue Plunge: The company's total revenue fell 27% to $1.11 billion in Q2, with net income dropping from $107.9 million last year to $27.3 million, highlighting the challenging market environment.
- New Operating Model Benefits: CEO emphasized that the shift to a built-to-order model provides certainty on key variables, allowing the company to lock in costs and profits before construction begins, thus mitigating risks from rising material and labor costs.
- Gross Margin Expectations: Management anticipates KB Home's full-year housing gross margin to rise to between 16.1% and 16.5%, up from 15.2% in Q2, setting a solid foundation for sequentially higher delivery volumes and gross margins in the upcoming quarters.
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See More
KB Home Shares Surge on New Built-to-Order Model
- Declining Deliveries: KB Home reported a 23% year-over-year drop in home deliveries to 2,395 units in Q2, reflecting the pressures of a sluggish housing market, which contributed to a 27% revenue plunge to $1.11 billion, indicating significant market challenges impacting performance.
- Net Income Decline: The company's net income fell sharply from $107.9 million a year ago to $27.3 million, with earnings per share dropping from $1.50 to $0.43, highlighting severe profitability challenges amid declining sales and delivery volumes.
- Advantages of New Model: CEO Rob McGibney emphasized that the shift to a built-to-order model provides certainty regarding key variables, allowing the company to lock in prices and costs after buyer commitment, thereby reducing exposure to rising material and labor costs, which is expected to enhance future profitability.
- Gross Margin Expectations: Management anticipates KB Home's full-year housing gross margin to rise to between 16.1% and 16.5%, up from 15.2% in Q2, indicating a positive outlook for higher delivery volumes and margins in the upcoming quarters, setting a solid foundation for fiscal 2026.
See More
KB Home's Strategy Amid High Mortgage Rates
- Declining Deliveries: KB Home reported a 23% year-over-year drop in home deliveries to 2,395 units in Q2, reflecting the ongoing pressure of high mortgage rates on the U.S. housing market, leading to a significant revenue decline.
- Revenue Plunge: The company's total revenue fell 27% to $1.11 billion in Q2, with net income dropping from $107.9 million last year to $27.3 million, highlighting the challenging market environment.
- New Operating Model Benefits: CEO emphasized that the shift to a built-to-order model provides certainty on key variables, allowing the company to lock in costs and profits before construction begins, thus mitigating risks from rising material and labor costs.
- Gross Margin Expectations: Management anticipates KB Home's full-year housing gross margin to rise to between 16.1% and 16.5%, up from 15.2% in Q2, setting a solid foundation for sequentially higher delivery volumes and gross margins in the upcoming quarters.
See More
U.S. Stocks Close Mixed as Chipmakers Weigh on Market
- Mixed Market Performance: The S&P 500 index fell by 0.10% and the Nasdaq 100 index dropped by 0.43%, while the Dow Jones Industrial Average rose by 0.35%, indicating a divergence in market sentiment, particularly under pressure from chipmakers.
- Chip Sector Pressure: Ahead of Micron Technology's earnings report, chipmakers saw declines, reflecting market concerns over AI infrastructure demand, despite Micron's stock rising over 260% this year, highlighting the volatility in tech stocks.
- Oil Price Impact: WTI crude oil prices sank to a 3.5-month low, leading to a drop in bond yields, with the 10-year Treasury yield falling to 4.40%, benefiting sectors like homebuilders and airlines by enhancing profit outlooks amid lower fuel costs.
- Decline in New Home Sales: U.S. May new home sales unexpectedly fell by 7.3% to 580,000 units, below the expected 640,000, indicating weakness in the housing market that could affect future economic growth expectations.
See More
KBH Stock Price Fluctuation and Dividend Stock Trends
- Price Range Analysis: KBH's 52-week low is $44.025 per share, with a high of $68.71, and the last trade at $61.36 indicates significant price fluctuations within this range, reflecting market caution regarding its future performance.
- Technical Indicator Insights: Currently, KBH's stock price is at 89.3% of its 52-week high, suggesting relative strength but still below historical peaks, which may influence investor buying decisions.
- Dividend Stock Trends: The article notes that 9 other dividend stocks have recently crossed above their 200-day moving average, indicating increased market interest in these stocks, potentially attracting more investors.
- Market Perspectives: The author's views do not necessarily reflect those of Nasdaq, reminding investors to consider multiple sources of information when making decisions to avoid reliance on a single viewpoint.
See More
Construction Materials & Machinery Stocks Surge
- Sector Performance: Construction materials and machinery stocks collectively rose by approximately 6% today, indicating strong market confidence in the sector, which may reflect an anticipated increase in construction activities.
- Builders FirstSource Leads: The company's stock surged by about 12.3%, positioning it as a leader in the industry, suggesting a competitive advantage and positive investor sentiment.
- JELD-WEN Holding's Strong Bounce: The stock increased by approximately 11.5%, highlighting its significant role in the construction industry's recovery, which may attract more investor interest in its growth potential.
- Positive Market Sentiment: The overall upward trend may signal a recovery in the construction sector, with enhanced investor confidence in future economic growth potentially driving more capital into related stocks.
See More
Analysis of Stock Price Movements for Multiple Companies
- Rating Downgrade Impact: Principal Financial Group's stock fell 4% after Bank of America downgraded its rating from neutral to underperform, with analysts forecasting a slowdown in operating income growth over the next 12 months, indicating a decline in previously healthy growth expectations following significant valuation increases.
- Energy Sector Decline: The energy sector within the S&P 500 dropped 2% as West Texas Intermediate crude futures briefly fell to $69.63 per barrel, causing APA Corp, Halliburton, and ConocoPhillips to decline over 3%, reflecting market concerns about energy demand.
- Travel Stocks Surge: Travel-related companies saw stock prices rise as oil prices tumbled, with Expedia Group gaining 9% and Booking Holdings increasing by 8%, suggesting a growing optimism in the recovery of the travel sector.
- Cerebras Earnings Report Disappointment: Cerebras shares plummeted 16% after its first earnings report revealed a Q1 loss of 22 cents on revenues of $193.4 million, with expectations of a gross margin decline to 36%-38% in Q2, highlighting the financial pressures the company faces.
See More
