KB Home (NYSE:KBH) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. KB Home missed analyst forecasts, with revenues of US$1.4b and statutory earnings per share (EPS) of US$1.49, falling short by 7.2% and 6.1% respectively. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on KB Home after the latest results.

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After the latest results, the consensus from KB Home's eleven analysts is for revenues of US$6.67b in 2025, which would reflect a measurable 2.7% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to decline 18% to US$7.12 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.04b and earnings per share (EPS) of US$8.30 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

View our latest analysis for KB Home

The consensus price target fell 9.8% to US$67.54, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on KB Home, with the most bullish analyst valuing it at US$86.00 and the most bearish at US$56.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.6% by the end of 2025. This indicates a significant reduction from annual growth of 9.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - KB Home is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for KB Home. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for KB Home going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for KB Home that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.