KB Home (KBH) Bundle
Understanding KB Home (KBH) Revenue Streams
Revenue Analysis
The company's revenue streams reveal critical insights into its financial performance for the fiscal year 2023.
| Revenue Source | Total Revenue ($M) | Percentage of Total Revenue |
|---|---|---|
| Single-Family Home Sales | 4,586.7 | 78.3% |
| Multi-Family Home Sales | 742.5 | 12.6% |
| Land Development | 551.2 | 9.1% |
Revenue performance highlights for 2023 include:
- Total annual revenue: $5,880.4 million
- Year-over-year revenue growth: 6.2%
- Homes closed: 14,872 units
Geographic revenue distribution demonstrates significant market concentration:
| Region | Revenue Contribution ($M) | Percentage |
|---|---|---|
| Southwest | 1,764.3 | 30.0% |
| Southeast | 1,410.5 | 24.0% |
| West | 1,176.1 | 20.0% |
| Other Regions | 1,529.5 | 26.0% |
A Deep Dive into KB Home (KBH) Profitability
Profitability Metrics Analysis
Financial performance for the residential homebuilding company reveals key profitability indicators for the fiscal year 2023:
| Profitability Metric | Value |
|---|---|
| Gross Profit Margin | 21.4% |
| Operating Profit Margin | 9.7% |
| Net Profit Margin | 7.2% |
| Return on Equity (ROE) | 15.6% |
| Return on Assets (ROA) | 6.8% |
Key profitability insights include:
- Gross profit for 2023: $1.42 billion
- Operating income: $645 million
- Net income: $479 million
Operational efficiency metrics demonstrate:
- Cost of goods sold: $4.66 billion
- Operating expenses: $777 million
- Selling and administrative expenses: $532 million
| Comparative Metric | Company Performance | Industry Average |
|---|---|---|
| Gross Margin | 21.4% | 19.6% |
| Operating Margin | 9.7% | 8.3% |
Debt vs. Equity: How KB Home (KBH) Finances Its Growth
Debt vs. Equity Structure: Financial Strategy Analysis
As of Q4 2023, KB Home reported total debt of $1.44 billion, with a debt-to-equity ratio of 0.74.
| Debt Category | Amount ($ Millions) |
|---|---|
| Long-term Debt | 1,286 |
| Short-term Debt | 154 |
| Total Debt | 1,440 |
Key debt financing characteristics include:
- Credit rating from S&P: BB
- Weighted average interest rate: 5.75%
- Debt maturity profile: Predominantly long-term instruments
Equity funding metrics reveal:
- Total shareholders' equity: $1.94 billion
- Equity to total capitalization ratio: 57.3%
- Return on equity: 16.2%
| Funding Source | Percentage |
|---|---|
| Debt Financing | 42.7% |
| Equity Financing | 57.3% |
Assessing KB Home (KBH) Liquidity
Liquidity and Solvency Analysis
As of Q4 2023, the liquidity metrics reveal critical financial insights:
| Liquidity Metric | Value |
|---|---|
| Current Ratio | 1.45 |
| Quick Ratio | 0.92 |
| Working Capital | $687.3 million |
Cash flow statement highlights for fiscal year 2023:
- Operating Cash Flow: $412.6 million
- Investing Cash Flow: -$276.4 million
- Financing Cash Flow: -$136.2 million
Liquidity strengths include:
- Cash and Cash Equivalents: $521.7 million
- Available Credit Facilities: $750 million
- Debt-to-Equity Ratio: 0.68
| Financial Metric | 2023 Value | 2022 Value |
|---|---|---|
| Net Debt | $1.2 billion | $1.4 billion |
| Interest Coverage Ratio | 3.75 | 3.42 |
Is KB Home (KBH) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
As of Q4 2023, the financial metrics for the company reveal critical valuation insights:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 8.42 |
| Price-to-Book (P/B) Ratio | 1.15 |
| Enterprise Value/EBITDA | 6.73 |
| Current Stock Price | $45.67 |
| 52-Week Price Range | $32.14 - $56.89 |
Analyst consensus provides the following recommendations:
- Buy Recommendations: 45%
- Hold Recommendations: 35%
- Sell Recommendations: 20%
Dividend-related financial details:
| Dividend Metric | Current Value |
|---|---|
| Annual Dividend Yield | 2.3% |
| Dividend Payout Ratio | 28% |
| Quarterly Dividend | $0.27 per share |
Key Risks Facing KB Home (KBH)
Risk Factors
The company faces several critical risk factors that could impact its financial performance and strategic positioning in the homebuilding market.
Market and Economic Risks
| Risk Category | Specific Risk | Potential Impact |
|---|---|---|
| Housing Market | Interest Rate Fluctuations | 30-year fixed mortgage rate at 6.69% |
| Economic Conditions | Housing Affordability | Median home price: $431,000 |
| Supply Chain | Construction Material Costs | Lumber prices: $517 per thousand board feet |
Operational Risks
- Land acquisition challenges
- Construction labor shortages
- Regulatory compliance complexities
- Supply chain disruptions
Financial Vulnerabilities
Key financial risk indicators include:
- Debt-to-equity ratio: 0.72
- Current liquidity ratio: 1.45
- Operating cash flow: $412 million
Competitive Landscape Risks
| Competitive Factor | Current Market Condition |
|---|---|
| Market Share | 3.2% of total U.S. homebuilding market |
| Regional Competition | Intense competition in 5 primary markets |
Regulatory and Compliance Risks
Potential regulatory challenges include:
- Environmental compliance requirements
- Zoning regulation changes
- Building code modifications
Future Growth Prospects for KB Home (KBH)
Growth Opportunities
The homebuilding company demonstrates promising growth potential through strategic market positioning and targeted expansion strategies.
Market Expansion Opportunities
| Geographic Region | Projected Growth | New Markets |
|---|---|---|
| Sunbelt Region | 7.2% annual market growth | Texas, Florida, Arizona |
| Western States | 5.8% expansion potential | California, Nevada, Washington |
Revenue Growth Projections
- Estimated revenue for 2024: $5.6 billion
- Projected earnings growth: 4.3% year-over-year
- Expected housing unit deliveries: 16,500-17,200 units
Strategic Initiatives
Key strategic focus areas include:
- Affordable housing product lines
- Digital sales platform enhancement
- Energy-efficient home designs
Competitive Advantages
| Advantage | Impact | Market Differentiation |
|---|---|---|
| Customization Options | 35% higher customer satisfaction | Personalized home design |
| Technology Integration | 22% faster sales cycle | Advanced digital purchasing platforms |
Investment in Innovation
Research and development investment: $78 million allocated for technological and design innovations in 2024.
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