- Q4 Revenue & Housing Revenues: Total revenues $1.69 billion, housing revenues down 15% to $1.68 billion despite 3,619 home deliveries.
- 2026 Guidance: Housing revenues projected $1.05–$1.15 billion, with adjusted gross profit margin of 15.4%–16% and 2,300–2,500 home deliveries.
- Share Repurchases: $115 million returned to shareholders in Q4, including 1.6M shares repurchased; $900 million remaining under new $1B buyback authorization.
- Land Investment & Inventory: $665 million spent on land in Q4; 65,000 lots (43% controlled) and $5.7 billion in inventory support future growth.
Operational Highlights
The company delivered 3,619 homes in Q4 2025, with a significant proportion being built-to-order (BTO) sales, which accounted for 57% of total deliveries. The company is focused on driving BTO sales, with a goal of at least four BTO sales per community per month, as it believes this approach provides better returns and allows for more control over margins. The company's lot position includes 65,000 lots, 43% of which are controlled.
Guidance and Outlook
For 2026, KB Home expects housing revenues between $5.1 billion and $6.1 billion, based on 11,000 to 12,500 deliveries. The company forecasts a housing gross profit margin of 15.4% to 16%. The guidance implies an ASP above the fourth-quarter 2025 ASP, driven by a mix shift towards higher-priced communities. Analysts estimate next year's revenue growth at 6.5%.
Valuation and Return to Shareholders
The company's current valuation metrics are as follows: P/E Ratio of 9.16, P/B Ratio of 0.85, and ROE of 10.32%. The company has a strong balance sheet, enabling a healthy dividend and share repurchases. In Q4 2025, the company repurchased 1.6 million shares for $100 million. For 2026, the company expects to repurchase $50 million to $100 million of its common stock in the first quarter, and plans to continue its share buyback program at a similar rate in subsequent quarters.
Margin Expectations and Risks
The company expects its first-quarter gross margin to decline due to regional and product mix within its cities, combined with pricing pressure on moving inventory. However, it anticipates the first quarter to be the bottom in margins and expects margins to improve throughout 2026. The company does not anticipate a significant change in construction or lot costs and has already taken a $14 million impairment charge.