The 10-second takeaway
For the quarter ended Nov. 30 (Q4), KB Home beat expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded, and earnings per share dropped significantly.
Margins shrank across the board.
KB Home chalked up revenue of $480 million. The 13 analysts polled by S&P Capital IQ foresaw revenue of $470 million. Sales were 6.4% higher than the prior-year quarter's $451 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.00. The 13 earnings estimates compiled by S&P Capital IQ anticipated $0.03 per share on the same basis. GAAP EPS of $0.18 for Q4 were 21% lower than the prior-year quarter's $0.23 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 4.9%, 1,540 basis points worse than the prior-year quarter. Operating margin was 4.9%, 310 basis points worse than the prior-year quarter. Net margin was 2.9%, 100 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $287 million. On the bottom line, the average EPS estimate is -$0.23.
Next year's average estimate for revenue is $1.6 billion. The average EPS estimate is -$0.18.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 570 members out of 1,236 rating the stock outperform, and 666 members rating it underperform. Among 392 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 138 give KB Home a green thumbs-up, and 254 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on KB Home is hold, with an average price target of $9.06.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings. He is the co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.