Investors are constantly on the lookout for stocks that are likely to outperform during earnings season, and KB Home (KBH) might be one such company. With their earnings report on the horizon, the signs are looking positive for KBH.
Recent activity points towards a potential earnings beat for the company. Analysts have been revising their earnings estimates upwards, suggesting a positive outlook for KBH. This trend is particularly noteworthy because it reflects the most up-to-date information available to analysts. The most accurate estimate for the upcoming quarter is currently higher than the broader Zacks Consensus Estimate of $2.04 per share. This signifies that analysts have recently increased their expectations for KBH, resulting in a Zacks Earnings ESP of +0.08%.
A positive Zacks Earnings ESP has historically been a strong indicator of both positive earnings surprises and stock outperformance. According to a 10-year backtest, stocks with a positive Earnings ESP and a Zacks Rank of #3 (Hold) or higher have a track record of exceeding expectations nearly 70% of the time, and have delivered an average annual return of over 28%.
Given KBH’s Zacks Rank #3 and positive ESP, investors might want to consider adding the stock to their portfolio before earnings are released. The recent upward revisions in earnings estimates suggest that KB Home is on a positive trajectory and could potentially deliver a beat in the upcoming report.
