KB Home: Too Much Visible Weakness; I Stay Sell-Rated
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Eleceed Capital604 FollowersFollow5ShareSavePlay(9min)CommentsSummaryKB Home remains a sell as demand weakens, margins compress, and guidance signals further deterioration into Q1 2026.KBH's shift to a build-to-order model is strategically sound, but near-term margin pain persists as high-cost inventory is cleared at discounts.Q4 2025 saw revenue down 15% y/y, operating margin drop 460 bps, and cancellation rates rise to 18%, reflecting affordability challenges.Despite appearing optically cheap, KBH's forward valuation is unattractive given eroding fundamentals and lack of near-term catalysts. MoMo Productions/DigitalVision via Getty Images Summary I gave a sell rating to KB Home (KBH) in June because demand is weak, margin is declining, and guidance was cut. I reiterate a sell rating. Demand continues to be weak, margins are declining faster than expected, and guidance points to furtherThis article was written byEleceed Capital604 FollowersFollowI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value and holding them for the long haul, allowing them to compound their earnings and shareholder returns.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.