KB Home Q3 revenue falls as higher mortgage rates impact housing market

Overview

• U.S. homebuilder's Q3 revenue down 20% yr/yr

• Adjusted EPS for Q3 fell to $1.05 from $1.61 yr/yr

• Company repurchased $50 mln of common stock in Q3

Outlook

• KB Home expects Q4 deliveries in the range of 3,000 to 3,500 homes

• Company sees Q4 housing revenues between $1.45 bln and $1.65 bln

• KB Home maintains full-year 2026 guidance for deliveries, revenues and margins within prior ranges

Result Drivers

• WEAK HOUSING MARKET - Co said higher mortgage rates and economic uncertainty made buyers more cautious, pressuring affordability

• BUILT TO ORDER SHIFT - Co said return to predominantly Built to Order business contributed to sequentially higher housing gross profit margin

• COMMUNITY COUNT GROWTH - Co said year-over-year community count growth reflects new community openings supporting sales

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 10 "hold" and 4 "sell" or "strong sell"

• The average consensus recommendation for the homebuilding peer group is "buy."

• Wall Street's median 12-month price target for KB Home is $56.33, about 17.7% above its September 21 closing price of $47.86

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 12 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)