KB Home (NYSE: KBH) is not out of the weeds, with its revenue contracting, orders and backlog declining, and margins under pressure, but these forces are already priced into its stock. Housing market woes, inflation, and high interest rates are no secret.
The market has had ample opportunity to adjust to the reality that interest rates will remain elevated for a prolonged period. The critical detail with KB Home is that it has repositioned itself as a built-to-order specialist capable of sustaining positive cash flows in all cycles.
