Stock fact sheet · data as of
KB Home (KBH): fair value, margin of safety and Wheel Score
Consumer Cyclical · Residential Construction · United States · Value
Is KBH undervalued?
KBH closed at 43.65 on 16 Oct 2026, 30% below the GLS average fair value of 62.28 from 9 models (5 of them above the price). That is a moderate margin of safety: the stock passes the "below fair value" rule of the Sunday Scan, and the Wheel Score gives it 25 of the 25 Value points.
There is a wide gap between Payback Time (14.01) and Graham Growth (171.07). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files KBH under Value: positive earnings at a P/E of 18 or less.
Nine valuation models for KBH
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 76.85 | +76% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 72.53 | +66% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 171.07 | +292% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 71.58 | +64% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 63.37 | +45% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 34.82 | -20% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 14.01 | -68% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 14.71 | -66% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 41.57 | -5% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | 56.81 | +30% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 54.00 | +24% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
KB Home scores 5 of 9 on the Piotroski F-score: a middling result that falls one point short of the Sunday Scan's "6 or more" rule. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. A GLS Moat score of 4.6/10 is a weak reading: the ten-year history the score grades (revenue, EPS, book value, margins, cash flow, share count, ROIC) has not been steady, so the Moat part of the Wheel Score contributes little.
Returns on capital are moderate - ROIC 7.6%, ROE 11.0%, ROA 6.4% - with debt at 0.44 times equity and a free-cash-flow yield of 1.2%.
The dividend yield is 2.29% at a payout ratio of 28%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Home Building 50%, Housing 50%, Land 0% (quarter Q2 FY2026).
Institutional ownership scores 10/10, insider activity 2/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 5 / 9 | ROIC | 7.6% |
|---|---|---|---|
| GLS Moat | 4.6 / 10 | ROE | 11.0% |
| Debt / equity | 0.44 | ROA | 6.4% |
| Free-cash-flow yield | 1.2% | Payout ratio | 28% |
| Institutions | 10 / 10 | Insiders · Congress | 2 · 5 / 10 |
Wheel Score 80: Prime
With a Wheel Score of 80, KB Home sits in the Prime band - price, quality and premium all line up for the wheel strategy. The parts: Value 25/25, Health 11/20, Moat 7/15, Premium 20/20, Stability 17/20. A high score is a ranking, not a signal: it says nothing about timing, the earnings date or your position size.
Implied volatility is 41% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 54,353 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 1.6M shares a day on a market cap of $2.7B, with a beta of 1.34 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 17 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 30% margin of safety | |
| Health | 11 / 20 | Piotroski 5/9 | |
| Moat | 7 / 15 | moat 4.6/10 | |
| Premium | 20 / 20 | implied volatility 41% | |
| Stability | 17 / 20 | 1.6M shares/day, $2.7B cap, beta 1.34 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 17 Dec 2026, 62 days away - outside the window of a 30-45-day put sold today. The shares go ex-dividend on 12 Nov 2026 (0.2500 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Residential Construction
The 12 companies below are the closest to KB Home by market cap within the Residential Construction industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| GRBK Green Brick Partners, Inc. | 61.98 | 91.90 | +33% | 79Good | $2.7B |
| HOVNP Hovnanian Enterprises, Inc. PFD DEP1/1000A | 16.85 | 130.60 | +87% | 39No options | $2.5B |
| MHO M/I Homes, Inc. | 126.02 | 176.77 | +29% | 76Good | $3.2B |
| MTH Meritage Homes Corporation | 60.28 | 101.28 | +40% | 80Prime | $3.9B |
| CVCO Cavco Industries, Inc. | 535.60 | 530.46 | -1% | 67Good | $4.1B |
| SKY Champion Homes, Inc. | 75.90 | 80.03 | +5% | 76Good | $4.1B |
| CCS Century Communities, Inc. | 55.55 | 55.18 | -1% | 59Fair | $1.6B |
| IBP Installed Building Products, Inc. | 187.94 | 112.54 | -67% | 57Fair | $5.0B |
| LGIH LGI Homes, Inc. | 44.08 | 92.94 | +53% | 72Good | $1.0B |
| BZH Beazer Homes USA, Inc. | 33.41 | 25.56 | -31% | 45Weak | $891M |
| DFH Dream Finders Homes, Inc. | 8.44 | 19.15 | +56% | 72Good | $767M |
| LEGH Legacy Housing Corporation | 27.24 | 45.55 | +40% | 72Good | $648M |
Screen the whole market the same way
A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the same eight-rule screen, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about KBH
Is KBH undervalued right now?
By the GLS models, moderately: at 43.65 the stock trades 30% below the average fair value of 62.28 (data as of 16 Oct 2026).
What is the Wheel Score of KBH and what does it mean?
KBH scores 80 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for KBH?
62.28 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does KB Home report earnings next?
The next earnings report is due on 17 Dec 2026, 62 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does KBH have listed options, and how liquid are they?
Yes. The nightly snapshot found 324 listed contracts with 54,353 open interest across all expiries and implied volatility of 41% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.