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Nick Robinson

Will KB Home's gain hold up?


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KB Home’s (NYSE:KBH) shares have managed to gain 38.6% in 2019 and the stock is clearly outperforming its industry, which has grown 25.7%. Whether the gains will hold up greatly depends on how investors perceive the current state of the company. However, there isn’t much to worry about, as KB Home has great fundamentals while being in a strong housing market.

KB Home reported its Q2 fiscal 2019 results on 26th June. The figures outperformed analysts’ expectations, with both the top and bottom lines surpassing the Zacks Consensus Estimate. The top line was better than the expectations by 9.3%, while the bottom line came out 30.8% better than expected. The upside (both regarding stock price and financial reports) was mainly due to the continued progress of the Returns-Focused Growth Plan. With the Growth Plan progressing, it ensured great average community count growth. On top of its strong fundamentals, the overall housing market fundamentals remained positive during 2019. The market stability and strength were certainly playing a role in the results that KB Home has delivered.

Again, when talking about whether the stock will hold up its gains or not, the main factor is the future stability of the market. If the market remains stable and no unexpected downfalls to the business pop up, the stock price might not only hold its gains but it might actually rise even more.

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