KB Home Manages To Beat Q4 Expectations, Outlook 'Remains Challenged' Analysts Warn

Earnings Performance - The company reported earnings of $2.52 per share, beating the consensus estimate of$ 2.44 per share [1] - The stock surged by 4.17% to $66.75 in early trading following the earnings report [5] Deliveries and Orders - KB Home deliveries grew by 17% year-on-year, exceeding expectations [2] - Orders for the quarter were 2,688, up 41% year-on-year, surpassing the Street's expectations of 32% growth [4] - Management expects orders to be flat year-on-year in Q1 2025, with a decline of 250 orders (3%) anticipated for the full year 2025 [4] Revenue and Margin Guidance - The company guided to housing revenue of$ 1.45 billion to $1.55 billion for Q1 and$ 7 billion to $7.5 billion for the full year [3] - Midpoint earnings guidance is$ 1.58 per share for Q1 and $8.41 per share for the full year [3] - Management's margin guidance for Q1 was better than feared, though risks remain due to assumptions on flat incentives, direct cost reductions, and cycle times [5] Analyst Ratings - Keefe, Bruyette & Woods maintained a Market Perform rating with a price target of$ 85 [6] - RBC Capital Markets reiterated a Sector Perform rating with a price target of $67 [6] Market Strategy - Management noted higher rates and rate volatility impacting homebuyer demand, leading to the use of incentives to maintain sales pace [2]