Yahoo Finance If You Invested $1000 in KB Home a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in KB Home (KBH) ten years ago? It may not have been easy to hold on to KBH for all that time, but if you did, how much would your investment be worth today?
KB Home's Business In-Depth
With that in mind, let's take a look at KB Home's main business drivers.
Based in Los Angeles, CA, KB Home is a well-known homebuilder in the United States and one of the largest in the state. The company’s revenues are generated from Homebuilding (accounting for 99.5% of fiscal 2023 total revenues) and Financial Services (0.5%) operations.
The company’s Homebuilding operations include building and designing homes that cater to first-time, move-up and active adult homebuyers on acquired or developed lands. KB Home also builds attached and detached single-family homes, town homes and condominiums.
There are four main reportable segments within the homebuilding reporting segment based on geographical presence: West Coast (comprising Washington, California and Idaho), Southwest (comprising Arizona and Nevada), Central (constituting Colorado and Texas) and Southeast (including Florida, North Carolina).
KB Home’s Financial Services operations offer mortgage banking, title and insurance services to homebuyers. This segment earns revenues mainly from insurance commissions and the provision of title services.
The company ended the first quarter of fiscal 2024 with $668.1 million of cash and cash equivalents compared with $727.1 million in fiscal 2023 end. The company has total liquidity of $1.75 billion, including $1.08 billion of available capacity under the unsecured revolving credit facility, with no outstanding cash borrowings. Additionally, the company ended the fiscal first quarter with a debt to capital of 30.4%, sequentially down 30 basis points (bps) from 30.7% and down 220 bps year over year from 32.6%. The company has no debt maturities until its 2026 term loan expiration and senior note maturity in June 2027. During the fiscal first quarter, the company also repurchased 826,663 shares of its outstanding common stock for $50 million. As of Feb 29, 2024, it had $113.6 million remaining under its current common stock repurchase authorization.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For KB Home, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in May 2014 would be worth $4,363.24, or a gain of 336.32%, as of May 7, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 177.38% and the price of gold increased 70.50% over the same time frame in comparison.
Analysts are anticipating more upside for KBH.
KB Home’s first-quarter fiscal 2024 results reflect earnings and revenues topping the Zacks Consensus Estimate by 12.8% and 1.2%, respectively. The metrics also grew on a year-over-year basis on the back of comparably improved demand conditions and a lower cancelation rate. This is reflected in the 9% increase in homes delivered compared with the year-ago period. It is further benefiting from its intent focus on implementing the built-to-order model, reducing cycle times and offering various forms of mortgage concessions. Owing to these tailwinds, KB Home witnessed 55% year-over-year net orders growth in the quarter. Although increases in construction and development costs, marketing and advertising expenses, and labor inflation are concerning, shares of the company have outperformed its industry in the past six months.
Over the past four weeks, shares have rallied 5.39%, and there have been 6 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
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KB Home (KBH) : Free Stock Analysis Report
