KB Home displays excellent free cash flow conversion and a recent history of earnings beats, but the thesis is undermined by a 23% revenue decline, high short interest, a confirmed technical downtrend, and below-minimum business quality — collectively pointing to a deteriorating fundamental setup with unattractive reward-to-risk.
Thesis pillars
- Revenue Decline→Stable
- High Short Interest↓Deteriorating
- Strong Cash Conversion→Stable
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Jan 23, 2026
KB Home (KBH) Stock Analysis
Recovery setup
Consumer Cyclical · Residential Construction
Sell if holding. Engine safety override at $46.17: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.3/10. Specifically: High short interest: 26%; Below-average business quality; Below long-term trend.
KB Home builds attached and detached single-family homes, townhomes, and condominiums across nine states in four segments—West Coast, Southwest, Central, and Southeast—targeting first-time and first move-up buyers, who represent more than 75% of annual deliveries. Homebuilding... Read more
Sell if holding. Engine safety override at $46.17: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.3/10. Specifically: High short interest: 26%; Below-average business quality; Below long-term trend. Chart setup: Death cross but MACD improving, RSI 57. Score 4.3/10, moderate confidence.
Passes 6/9 gates (positive momentum, clean insider activity, news events none recent, earnings proximity 49d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: aggressive.
About KB Home
About KB Home
KB Home held 64,612 lots owned or controlled across four homebuilding segments at November 30, 2025—down from 76,703 a year earlier—with West Coast at 20,750 lots, Central at 20,614, Southeast at 12,106, and Southwest at 11,142. Homebuilding operations accounted for 99.6% of total revenues in 2025, with the company delivering homes across nine states and 49 major markets. First-time and first move-up homebuyers have averaged more than 75% of annual deliveries for over a decade, with California generating the highest proportion of revenues.
KB Home builds homes primarily under the Built to Order process, where construction begins only after a signed purchase contract and preliminary credit approval. In 2025, approximately 55% of homes delivered were Built to Order, below the historical 60–70% average due to supply chain disruptions in prior years; the company intends to bring that mix closer to historical levels in 2026. Revenue per home reflects a base price plus design options selected at KB Home Design Studios in each served market. The company uses fixed-price contracts with larger trade partners to moderate construction cost inflation. Independent contractors perform essentially all land development and home construction, exposing the company to availability and performance risk in a tight labor market. Financial services—mortgage banking through KBHS, a joint venture with GR Alliance (a subsidiary of Guaranteed Rate, Inc.)—contributed 0.4% of 2025 revenues.
Show full overview
California presents the most concentrated geographic risk. The 10-K notes that the business is presently concentrated in California, Florida, Nevada, and Texas, with California generating the highest proportion of revenues. Effective 2026, California's new energy efficiency standards require all new residences to be electric-ready for heating, cooling, cooking, clothes drying, and water heating systems. Solar installation disruptions in 2024–2025, driven by federal tax credit changes and California net metering amendments, caused delivery delays, and the state's regulated permitting and wildfire-protection requirements have increased land development costs and entitlement timelines.
See also: Consumer Cyclical · Residential Construction
From KB Home's most recent 10-K filing, extracted June 10, 2026.
Recent developments
updated 2026-10-29Recent Developments — KB Home
Latest news
- NEWS Ten-Year Treasury Yields Fall Below 5%: These 10 Real-Estate Stocks Are Rallying Sharply — benzinga Oct 22, 2026 neutral
- NEWS President Donald J. Trump Decreases Housing Costs For Americans; Executive Order To Cut Mortgage Costs, Eliminate Qualif — benzinga Oct 22, 2026 positive
- NEWS Reported Earlier, U.S. Treasury Department Issues Proposed Regulations To Make Homeownership More Affordable; From Janua — benzinga Oct 22, 2026 neutral
- NEWS Homebuilder Sentiment Hits 2012 Lows As Stocks Trade Like They Did During COVID-19 Pandemic — benzinga Oct 19, 2026 negative
- NEWS Wells Fargo Maintains Underweight on KB Home, Lowers Price Target to $42 — benzinga Oct 16, 2026 negative
Generated 2026-10-29T11:08:51Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHProducthomebuilding100%10-K Item 1: 'Our homebuilding operations represent the majority of our business, accounting for 99.6% of our total revenues in 2025'
- HIGHCustomerfirst-time and first move-up homebuyers75%10-K Item 1: 'first-time and first move-up homebuyers have accounted for an average of over 75% of our annual deliveries'
- MEDIUMGeographicCalifornia10-K Item 1A: 'We generate the highest proportion of our revenues from and make significant inventory investments in our California operations'
- MEDIUMGeographicCalifornia, Florida, Nevada and Texas10-K Item 1A: 'our business is presently concentrated in California, Florida, Nevada and Texas'
Material Events(8-K, last 90d)
- 2026-05-01Item 5.02HIGHRobert R. Dillard, KB Home's Executive VP and CFO, resigned effective May 8, 2026. Decision not related to any disagreement with KB Home or its financial or accounting policies or practices. No successor named.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
4 floor-breakers
Revenue shrinking — -20.0% YoY. Growth thesis broken unless recovery story develops.static
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Quality below the gate floor. Component breakdown shows what dragged the score down.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $46.17: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.3/10. Specifically: High short interest: 26%; Below-average business quality; Below long-term trend. Chart setup: Death cross but MACD improving, RSI 57. Prior stop was $43.01. Score 4.3/10, moderate confidence.
Analyst target $44.49 reached (−3.6% from $46.17); no take-profit level is published. Prior stop was $43.01. Stop-loss: $43.01.
Concentration risk — Product: homebuilding (99.6%); Concentration risk — Customer: first-time and first move-up homebuyers (75.0%); Target reached (-3.6% upside).
KB Home trades at a P/E of 13.0 (forward 12.9). TrendMatrix value score: 6.7/10. Verdict: Sell.
24 analysts cover KBH with a consensus score of 2.7/5. Average price target: $51.
What does KB Home do?KB Home builds attached and detached single-family homes, townhomes, and condominiums across nine states in four...
KB Home builds attached and detached single-family homes, townhomes, and condominiums across nine states in four segments—West Coast, Southwest, Central, and Southeast—targeting first-time and first move-up buyers, who represent more than 75% of annual deliveries. Homebuilding generates 99.6% of revenues; California provides the highest proportion. The company held 64,612 lots owned or controlled at November 30, 2025.