KB Home (KBH) Stock Forecast & Price Target

KB Home is positioned to deliver earnings growth that outpaces revenue, supported by a projected FY28 EPS of $4.50, up 22% year over year, on revenue of $5.5 billion, up 7%, aided by buybacks that reduce the share count by 3 million annually. Its build-to-order model and focus on first-time and move-up buyers should support mix and margin quality, while order growth of 6% to 12.4k and a 4% rise in closings to 11.3k reflect resilient demand across its core markets. Although gross margin is expected to rebound only to 16.6% in FY28, the company’s sustainability leadership, land investment, and financial services income provide additional support to fundamentals despite mortgage-rate and land-cost headwinds.

KB Home is facing a negative fundamental setup because 3Q’26 results showed orders of 2,604, down 12% y/y and below expectations, while revenue fell 20% y/y to $1.3 billion even as gross margin only held at 16.5% to 16.8% amid higher land costs, competitive pricing pressure, and rising fuel costs. The outlook worsens as F4Q26 guidance implies a lower 16.3% gross margin, higher SG&A/sales of 10.3% to 10.9%, and reduced FY26 housing revenue of $4.9 billion to $5.1 billion, reflecting a less profitable sales mix and weaker demand in SoCal. Looking into FY27, slowing community development, a projected decline in community count to 270 to 275, tight mortgage standards, and elevated affordability pressure create downside risk to closings, margins, and EPS.