KB Home (KBH) receives a strong valuation ranking of 76 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. KBH has a better value than 76% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
KBH has a trailing twelve month Price to Earnings (PE) ratio of 12.6 which places it around the histroical average of roughly 15. KBH is currently trading at a average value due to investors paying around what the stock is worth in relation to its earnings. KBH's trailing-12-month earnings per share (EPS) of 3.21 does justify its share price in the market. Trailing PE ratios don't factor in the company's projected growth rate, resulting in select firms having high PE ratios due to high growth potential enticing investors even when the underlying company has produced low earnings to date.
KBH's 12-month-forward PE to Growth (PEG) ratio of 1.64 is considered a poor value as the market is overvaluing KBH in relation to the company's projected earnings growth due. KBH's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.
All together these valuation metrics paint a pretty poor picture for KBH at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for KBH are worse than the average of the market resulting in a valuation score of 76.