KBH Final: Steps in the Right Direction. Need to Prove Mix Benefits are Durable

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KBH Final: Steps in the Right Direction. Need to Prove Mix Benefits are Durable

Homebuilders & Building Products

Homebuilders - Market Weight

KB HOME (KBH) June 23, 2026

KBH Final: Steps in the Right Direction. Need to Prove Mix Rating:

Benefits are Durable Underperform

Price:

$52.73

The Wolfe Byte Price Target:

The equity screens cheap on a P/BV basis, yet with returns below peers and on the $54

Prior: $49lower end of historical levels, we continue believing the equity should trade at the % Upside:

lower end of its historical range and we retain our Underperform rating. 2.4%

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KBH produced solid 2Q results relative to expectations as a BTE Gross Margin

offset a modest miss on Orders. While results remain challenged relative to peers Company Information

and versus 2025’s standards (2026E EPS -48% YoY), the company deserves credit 52-Week Range $45 - $68

$3,303 Cap. (MM)for quickly returning to its ~70% BTO target on Orders with Closings to follow suit Market $5,080 Enterprise Value (MM)

in 2H26. The transition has been painful, yet the benefit to Gross Margins moving Shares Out. (MM) 62.6

forward is meaningful as BTO Gross Margins continue garnering ~400 bps better Avg. Value Traded (MM) $118.46

Adj. Debt to Cap 31.8%

margins versus Spec offerings. As we take a step back, the equity is undoubtedly SI% of Float 12.1%

cheap on a P/BV basis, yet our updated estimates imply an ROA of only 3.0% in Price to Earnings 16x

2026, the second lowest of the group behind LGIH. The equity trades at 16.5X our Price/ Tangible Value 0.8x

2026 EPS estimate, well above the high end of its historical range. We do expect Price Performance

metrics to improve in 2027, yet we the fact of the matter is we expect KBH faces YTD LTM