KB Home (KBH) is leading homebuilders higher today after the company reported strong third quarter results yesterday afternoon.
KB Home beat estimates on the top and bottom line. Earnings grew 21% to $0.51/share while revenue rose 25% to $1.14 billion.
Deliveries rose 11% 2765, but that number would have been higher by 50 homes without the disruption in Houston by Hurricane Harvey. Fortunately, none of the company's homes in backlog were damaged by recent natural disasters. However, hurricanes did have an impact an orders during the quarter; both Houston and Florida are in recovery mode.
Net order value grew 15% to $1.07 billion on a 4% increase in net orders to 2,608, with double-digit growth in the Company's West Coast and Southwest regions. Ending backlog value grew 14% to $2.12 billion, with homes in backlog up 4% to 5,455 and the average selling price of those homes rising 10%.
Market conditions remains favorable as the housing market chugs along. As a result, KB Home called for top line growth in the fourth quarter and fiscal 2018.
KBH hit a four-year high today. With a valuation just over $2 billion, the stock now trades at 1.15x book value (the preferred way to value homebuilders), which is lower than the other largest home builders like DR Horton (DHI -- 2x book), Pulte (PHM 1.9x), Lennar (LEN -- 1.7x), and Toll Brothers (TOL -- 1.5x).