KB Home (KBH) Stock Price & How to Invest

KB Home builds and sells attached and detached single-family homes, townhomes and condominiums, aimed largely at first-time and first-move-up buyers. It reports four homebuilding segments (West Coast, Southwest, Central and Southeast) plus a financial services arm, and it ended the quarter that closed May 31, 2026 operating 280 communities, up about 11 percent from a year earlier. The distinguishing feature of the model is Built-to-Order: rather than putting up finished spec inventory and discounting whatever does not sell, KB Home starts most houses after a buyer has chosen a floor plan and then has them personalize the house at a design studio, which shows up as both higher option revenue and a longer cash conversion cycle. That share was 73 percent of net orders in the second quarter. The company also captures the mortgage, with KBHS Home Loans financing roughly 81 percent of buyers who used a loan, and it has certified its homes to ENERGY STAR standards for years, which is a real cost input in California where a large share of its communities sit.

The investment picture in October 2026 is a housing-cycle question wearing a company-specific costume. Trailing revenue of ~$5.18 billion is down, with the latest quarter's revenue about 20 percent below a year earlier, and trailing net income of ~$226 million compares with ~$429 million for all of fiscal 2025. The second quarter (ended May 31, 2026) delivered 2,395 homes against 3,120 a year earlier at an average selling price of ~$461,900, and housing gross margin fell to 15.2 percent from 19.3 percent. The fiscal third quarter, ended August 31, 2026, showed sequential improvement: revenue of ~$1.30 billion versus ~$1.11 billion in the second quarter, net income of ~$65.3 million versus ~$27.4 million, and diluted EPS of $1.05 against a consensus near $0.90. The balance sheet is not stressed: the stock trades near 0.69 times book on a ~$2.64 billion market capitalization, debt to equity is about 56 percent, and the company keeps paying a $1.00 annual dividend, declared again for the fourth quarter on October 8, 2026. Even so, the stock closed at ~$43.46 on October 16, 2026, down about 24 percent year to date and 29 percent over one year, near the bottom of its ~$40.92 to ~$67.57 52-week range, as mortgage rates climbed and resale sellers began cutting prices. Analysts expect fiscal 2026 EPS of about $3.21, down roughly 52 percent, and fourth-quarter results are expected around December 17, 2026.

The core risk is that housing gross margin has reset rather than dipped: 15.2 percent in the quarter against 19.3 percent a year earlier is a 410 basis point move, and the guided recovery to the 16 percent range still leaves the business materially less profitable than it was, with land bought at cycle-peak prices flowing through cost of sales for several more quarters. Operating leverage runs the wrong way at this volume, with SG&A at 12.7 percent of housing revenues versus 10.7 percent, because the fixed cost of 280 communities does not shrink when deliveries fall 23 percent. Concentration is real: a large share of communities sits in California and other high-price Western markets where affordability breaks first when rates rise, and where any local employment shock hits the order book directly. Leadership changed on March 1, 2026, with Robert McGibney taking over as chief executive after Jeffrey Mezger's two decades in the role, which puts a strategy shift and a new operator in the same window. Debt to capital climbing to 34.1 percent by mid-2026 while the company repurchased shares is a deliberate use of the balance sheet that works if the ramp arrives and compounds the problem if the downturn extends. A newer pressure arrived in October 2026: resale sellers have started cutting asking prices, which competes directly with new-home pricing, and analysts have trimmed targets (RBC moved to $47 from $50 on October 15, 2026) with the consensus rating at hold.

14 analysts publish price targets on KBH, averaging $52.36 against a $43.30 price as of October 2026, or +20.9%. The published targets run from $39.00 to $70.00, a moderate spread, and the ratings split 3 buy, 9 hold, 4 sell. Over the last six months there have been 0 raises and 9 cuts among the published actions. A price target is what an analyst published on a date, not a prediction, and sell-side ratings skew positive across the whole market.

Read the full KBH forecast and price target for the target table, the recent rating actions by firm, and how the consensus has shifted.

We give no verdict on KB Home. Both cases are real, which is why the question is contested at all, so here is the strongest version of each.

The case for buying. The Built-to-Order pivot and what it does to margin. KB Home has been moving production away from speculative inventory and back toward houses sold before they are started, and that reached 73 percent of net orders in the second quarter. The most optimistic published target, $70.00, assumes this works close to its best case.

The case against. The core risk is that housing gross margin has reset rather than dipped: 15.2 percent in the quarter against 19.3 percent a year earlier is a 410 basis point move, and the guided recovery to the 16 percent range still leaves the business materially less profitable than it was, with land bought at cycle-peak prices flowing through cost of sales for several more quarters. The most pessimistic target, $39.00, is roughly what KBH is worth if this bites instead.

Read the full bull and bear case on KBH, including what would have to change to break either one. Walnut is not an investment adviser.

A simple financial snapshot. These are approximations and refresh quarterly; for current figures see KB Home's investor relations page or your broker.

• Revenue (TTM): ~$5.18 billion (latest quarter down ~20% YoY)
• Q3 FY2026 (ended Aug 31, 2026): revenue ~$1.30 billion, net income ~$65.3 million, diluted EPS $1.05 vs ~$0.90 estimate
• Net income (TTM): ~$226 million (FY2025: ~$429 million)
• Margins (TTM): gross ~17.1%, operating ~6.0%, net ~4.4%
• P/E (trailing / forward): ~12.2x / ~12.0x
• Price to book: ~0.69x at a ~$43.46 share price (Oct 16, 2026)
• Dividend yield: ~2.3% ($1.00 annual)
• Market cap: ~$2.64 billion

Trailing EPS of ~$3.55 puts the stock near 12.2 times earnings, and the forward multiple of about 12.0 is barely lower, which is the market saying earnings are bottoming rather than rebounding sharply; consensus expects fiscal 2026 EPS near $3.21 and fiscal 2027 near $3.60. The more-cited number is price to book at about 0.69, since homebuilder equity is mostly land and houses carried at cost, though a builder holding cycle-peak land is exactly the case where carrying value overstates realizable value. With ~$2.14 billion of debt against ~$159 million of cash, leverage is a larger part of the capital structure than the ~$2.64 billion equity value suggests.

Other names that sit close to KBH: same theme, named as a direct competitor, or held beside it in the same funds. Each entry says which. Worth a look if you are thinking about diversification within a thesis rather than concentration on one ticker.

There are three common ways to get KBH exposure. Buy shares (or fractional shares) directly at any major broker. Hold an ETF that includes it, which spreads the position across many companies. Or build it into a focused thematic portfolio, so KBH sits alongside other stocks that express the same thesis.

Walnut takes the portfolio route. Describe a thesis where KBH fits (for example “AI infrastructure” or “dividend-growth large-caps”) and the AI proposes 5 to 6 constituents with target weights. You review the plan and fund it through your own broker when you're ready.

New to this? Start with how to invest in stocks, see how to analyze a stock with AI, or compare the best AI stock analyzers.

KBH is a rate-sensitive, book-value-anchored homebuilder in the middle of two transitions at once, a Built-to-Order production model and a new chief executive. Its fiscal third quarter beat EPS estimates ($1.05 vs about $0.90), but the shares still fell to about $43.46 by October 16, 2026 as mortgage rates and resale price cuts weighed on the group, so what anyone concludes depends on whether the delivery and margin recovery carries into fiscal 2027.

Whether KBH is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, what would have to go right, and the risks in is KBH a buy or a sell?, and where the stock could go from here in the KBH stock forecast.

For income investors, whether KBH pays a dividend and how the payout looks is covered in does KBH pay a dividend? And to weigh KBH against a peer, read the full side-by-side comparisons: KBH vs DHI and KBH vs LEN.