KB Home Seen With Risks After Build-to-Order Pivot -- Market Talk

Dow Jones2025-12-24

0916 ET - KB Home's pivot back to primarily a build-to-order strategy could pose some near-term risks and create earnings turbulence next year, Raymond James analysts say in a note. While customers may appreciate the simplified selling process and a renewed focus on personalized upgrades, the company may be giving up some of its competitive edge in the process, given other homebuilders are still aggressively using mortgage rate buydowns to generate lower monthly payments and close deals faster as affordability remains key, the analysts say. "We fear KBH may be unilaterally disarming," they say. The magnitude of KB Home's recent price cuts and its historically low starting backlog imply that its gross margins may not normalize until well into fiscal 2027 or beyond, they say, downgrading the stock to market perform from outperform. (kelly.cloonan@wsj.com)

(END) Dow Jones Newswires

December 24, 2025 09:16 ET (14:16 GMT)

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While customers may appreciate the simplified selling process and a renewed focus on personalized upgrades, the company may be giving up some of its competitive edge in the process, given other homebuilders are still aggressively using mortgage rate buydowns to generate lower monthly payments and close deals faster as affordability remains key, the analysts say. \"We fear KBH may be unilaterally disarming,\" they say. The magnitude of KB Home's recent price cuts and its historically low starting backlog imply that its gross margins may not normalize until well into fiscal 2027 or beyond, they say, downgrading the stock to market perform from outperform. (kelly.cloonan@wsj.com) \n</p>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  December 24, 2025 09:16 ET (14:16 GMT)\n</p>\n<p>\n  Copyright (c) 2025 Dow Jones &amp; Company, Inc.\n</p>\n</font>","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>KB Home Seen With Risks After Build-to-Order Pivot -- Market Talk</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nKB Home Seen With Risks After Build-to-Order Pivot -- Market Talk\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2025-12-24 22:16</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<font class=\"NormalMinus1\" face=\"Arial\">\n<p>\n     0916 ET - <a href=\"https://laohu8.com/S/KBH\">KB Home</a>'s pivot back to primarily a build-to-order strategy could pose some near-term risks and create earnings turbulence next year, Raymond James analysts say in a note. While customers may appreciate the simplified selling process and a renewed focus on personalized upgrades, the company may be giving up some of its competitive edge in the process, given other homebuilders are still aggressively using mortgage rate buydowns to generate lower monthly payments and close deals faster as affordability remains key, the analysts say. \"We fear KBH may be unilaterally disarming,\" they say. The magnitude of KB Home's recent price cuts and its historically low starting backlog imply that its gross margins may not normalize until well into fiscal 2027 or beyond, they say, downgrading the stock to market perform from outperform. 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