As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at home builders stocks, starting with KB Home (NYSE: KBH).
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 12 home builders stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.7%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.1% since the latest earnings results.
KB Home (NYSE: KBH)
The first homebuilder to be listed on the NYSE, KB Home (NYSE: KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.
KB Home reported revenues of $2 billion, up 19.5% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ backlog estimates but a significant miss of analysts’ EBITDA estimates.
“We had a strong finish to 2024, with significant year-over-year growth in our fourth-quarter revenues and diluted earnings per share. Our higher revenues reflected an increase in deliveries, which were driven by faster build times. Net orders rose roughly 40% year over year, as buyers continued to demonstrate a desire for homeownership and housing market conditions improved relative to last year, despite ongoing mortgage interest rate headwinds,” said Jeffrey Mezger, Chairman and Chief Executive Officer.
KB Home scored the fastest revenue growth and highest full-year guidance raise of the whole group. Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 1% since reporting and currently trades at $61.10.
Is now the time to buy KB Home? Access our full analysis of the earnings results here, it’s free.
Best Q4: Champion Homes (NYSE: SKY)
Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.
Champion Homes reported revenues of $644.9 million, up 15.3% year on year, outperforming analysts’ expectations by 9.2%. The business had an incredible quarter with a solid beat of analysts’ sales volume estimates and an impressive beat of analysts’ EPS estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $93.70.
Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Toll Brothers (NYSE: TOL)
Started by two brothers who started by building and selling just one home in Pennsylvania, today Toll Brothers (NYSE: TOL) is a luxury homebuilder across the United States.
Toll Brothers reported revenues of $1.86 billion, down 4.6% year on year, falling short of analysts’ expectations by 2.9%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 12.6% since the results and currently trades at $106.69.
Read our full analysis of Toll Brothers’s results here.
NVR (NYSE: NVR)
Known for its unique land acquisition strategy, NVR (NYSE: NVR) is a respected homebuilder and mortgage company in the United States.
NVR reported revenues of $2.85 billion, up 17% year on year. This number topped analysts’ expectations by 2.3%. More broadly, it was a satisfactory quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ backlog estimates.
The stock is down 13.6% since reporting and currently trades at $7,251.
Read our full, actionable report on NVR here, it’s free.
Meritage Homes (NYSE: MTH)
Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.
Meritage Homes reported revenues of $1.62 billion, down 2.3% year on year. This result surpassed analysts’ expectations by 2.9%. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ backlog estimates.
The stock is down 10.1% since reporting and currently trades at $70.90.
Read our full, actionable report on Meritage Homes here, it’s free.
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