KB Home Shares Plunge 6% Following Q4 EPS Miss

KB Home (NYSE:KBH) shares were trading nearly 6% lower Thursday morning after the company reported Q4 results, with EPS of $2.47 missing the Street estimate of $2.87. Revenue was $1.94 billion (up 16% year-over-year), compared to the Street estimate of $1.98 billion. Management provided its guidance for Q1, anticipating housing revenues to be in the range of $1.25-$1.40 billion.

Analysts at Wedbush lowered their price target to $42 from $44 on the company’s shares following the announcement. Their 2023/2024 EPS estimates moved to $5.64/$6.06 from $8.86/$9.53 and their 2023/2024 sales estimates moved to $5.6/$5.8 billion from $6.7/ $7.1 billion.

The analysts believe slimmed down gross margins in the low 20% range, versus their mid-20% outlook previously, and a mixture of price adjustments/financing incentives should produce positive 2023 EPS for the company and EPS growth into 2024.