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KBH, KB Home

Homebuilders capital-intensive

Home is one of the largest and most trusted homebuilders in the U.S.

Our financial services operations, which accounted for the remaining .4% of our total revenues in 2025 , offer various insurance products to our homebuyers in the markets where we build homes and provide title services in certain of those markets.

Our financial services operations also provide mortgage banking services, including residential consumer mortgage loan ("mortgage loan") originations, to our homebuyers indirectly through KBHS Home Loans, LLC (" KBHS "), an unconsolidated joint venture between us and a third party.

Latest annual: FY2025 10-K

KBH · KB Home

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$6.2B

−10.0% YoY · 8% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $5.5B 5-yr avg $6.4B

Operating margin 6.3% 5-yr avg 12.2%

ROIC 7% 5-yr avg 19%

Owner-earnings margin 7% 5-yr avg 5%

Free cash flow margin 7% 5-yr avg 5%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Operating margin has run about 8.7% through the cycle, a thin margin, where volume, cost discipline and the price it gets all bear on the result. The operating margin has swung widely — from 4.2% to 16% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run in the teens (median 15%, above 15% in 4 of 10 years). Owner earnings agree: roughly 5% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

Most recent quarterly filing 10-Q filed Jul 9, 2026 Source at SEC EDGAR →

Revenue down 27.3% year over year; operating income down 73.8%

figures computed from the filing's XBRL

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMay 2026
											Income statement
$3.6B	$4.4B	$4.5B	$4.6B	$4.2B	$5.7B	$6.9B	$6.4B	$6.9B	$6.2B	$5.5B	RevenueRevenue
11%	10%	10%	—	—	—	—	—	—	—	8%	SG&A / revenueSG&A/rev
$152M	$283M	$346M	$348M	$364M	$695M	$1.1B	$771M	$851M	$554M	$346M	Operating incomeOp. inc.
4.2%	6.5%	7.6%	7.6%	8.7%	12.1%	15.5%	12.0%	12.3%	8.9%	6.3%	Operating marginOp. mgn
$106M	$181M	$170M	$269M	$296M	$565M	$817M	$590M	$655M	$429M	$272M	Net incomeNet inc.
29%	38%	54%	23%	19%	19%	24%	23%	23%	23%	22%	Effective tax rateTax rate
											Cash flow & returns
$189M	$513M	$222M	$251M	$311M	($37M)	$183M	$1.1B	$363M	$336M	$408M	Operating cash flowOp. cash
$4M	$3M	$3M	$27M	$28M	$29M	$32M	$36M	$37M	$37M	$40M	DepreciationDeprec.
$63M	$315M	$33M	($63M)	($35M)	($660M)	($695M)	$421M	($364M)	($177M)	$55M	Working capital & otherWC & other
—	—	$7M	$40M	$29M	$39M	$45M	$35M	$39M	$48M	$49M	CapexCapex
—	—	0.2%	0.9%	0.7%	0.7%	0.7%	0.6%	0.6%	0.8%	0.9%	Capex / revenueCapex/rev
—	—	$219M	$224M	$282M	($66M)	$151M	$1.0B	$323M	$298M	$360M	Owner earningsOwner earn.
—	—	4.8%	4.9%	6.7%	−1.2%	2.2%	16.3%	4.7%	4.8%	6.5%	Owner earnings marginOE mgn
—	—	$214M	$211M	$282M	($77M)	$138M	$1.0B	$323M	$287M	$360M	Free cash flowFCF
—	—	4.7%	4.6%	6.7%	−1.3%	2.0%	16.3%	4.7%	4.6%	6.5%	Free cash flow marginFCF mgn
$9M	$9M	$9M	$20M	$38M	$54M	$52M	$57M	$72M	$69M	$65M	Dividends paidDiv. paid
$86M	$0	$35M	$0	$0	$188M	$150M	$411M	$354M	$541M	—	BuybacksBuybacks
10%	15%	11%	14%	15%	21%	25%	19%	19%	12%	7%	ROICROIC
6%	9%	8%	11%	11%	19%	22%	15%	16%	11%	7%	Return on equityROE
6%	9%	8%	10%	10%	17%	21%	14%	14%	9%	5%	Retained to equityRetained/eq
											Balance sheet
$593M	$721M	$575M	$455M	$683M	$292M	$330M	$727M	$599M	$230M	$201M	Cash & investmentsCash+inv
$5.1B	$5.0B	$5.1B	$5.0B	$5.4B	$5.8B	$6.7B	$6.6B	$6.9B	$6.7B	$6.8B	Total assetsAssets
($593M)	($721M)	($575M)	($455M)	($683M)	($292M)	($330M)	($727M)	($599M)	($230M)	($201M)	Net debt / (cash)Net debt
$1.7B	$1.9B	$2.1B	$2.4B	$2.7B	$3.0B	$3.7B	$3.8B	$4.1B	$3.9B	$3.8B	Shareholders’ equityEquity
0.5%	0.3%	0.3%	0.4%	0.5%	0.5%	0.4%	0.5%	0.5%	0.7%	0.7%	Stock comp / revenueSBC/rev
											Per share
96.3M	98.3M	101M	93.8M	94.1M	93.6M	89.3M	83.4M	77.0M	69.3M	63.2M	Shares out (diluted)Shares
$37.34	$44.43	$44.99	$48.52	$44.46	$61.17	$77.27	$76.88	$90.05	$90.05	$87.07	Revenue / shareRev/sh
$1.10	$1.84	$1.69	$2.86	$3.15	$6.03	$9.14	$7.08	$8.51	$6.19	$4.30	EPS (diluted)EPS
—	—	$2.17	$2.39	$3.00	$-0.70	$1.69	$12.56	$4.20	$4.31	$5.69	Owner earnings / shareOE/sh
—	—	$2.12	$2.24	$3.00	$-0.82	$1.55	$12.56	$4.20	$4.15	$5.69	Free cash flow / shareFCF/sh
$0.09	$0.09	$0.09	$0.22	$0.40	$0.58	$0.59	$0.68	$0.93	$0.99	$1.02	Dividends / shareDiv/sh
—	—	$0.07	$0.43	$0.31	$0.42	$0.51	$0.43	$0.51	$0.70	$0.77	Cap. spending / shareCapex/sh
$17.90	$19.59	$20.66	$25.40	$28.33	$32.26	$40.97	$45.70	$52.77	$56.33	$60.06	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+10.3%/yr	+15.2%/yr
Owner earnings / share	+10.3%/yr (7-yr)	+7.5%/yr
EPS	+21.2%/yr	+14.5%/yr
Dividends / share	+30.7%/yr	+19.6%/yr
Capital spending / share	+38.1%/yr (7-yr)	+17.9%/yr
Book value / share	+13.6%/yr	+14.7%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Housing-10.0%
“In 2025, housing revenues declined 10% from the previous year, reflecting a 9% decrease in the number of homes delivered and a slight decrease in their overall average selling price.”
✓ figure matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

69Mpeak FY2018

ROIC

12%low FY2016

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$298Mowner earningsvs.$429Mnet incomelow FY2021

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $298M of owner earnings, the operating cash left after the $37M it takes just to hold its position. It put $11M more into growth; free cash flow, after that spending, was $287M.

Reported net income$429M

Owner earnings$298M · 5% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$429M	$655M	$590M	$817M	$565M
Depreciation & amortizationnon-cash charge added back	+$37M	+$37M	+$36M	+$32M	+$29M
Stock-based compensationreal costnon-cash, but a real cost	+$46M	+$34M	+$35M	+$29M	+$29M
Working capital & othertiming of cash in and out, other non-cash items	−$177M	−$364M	+$421M	−$695M	−$660M
Cash from operations	$336M	$363M	$1.1B	$183M	($37M)
Maintenance capital expenditurethe spending needed just to hold position and volume	−$37M	−$39M	−$35M	−$32M	−$29M
Owner earnings	$298M	$323M	$1.0B	$151M	($66M)
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$11M	—	—	−$13M	−$11M
Free cash flow	$287M	$323M	$1.0B	$138M	($77M)
Owner-earnings marginowner earnings ÷ revenue	5%	5%	16%	2%	-1%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $37M, roughly its depreciation, the rate its assets wear out). The other $11M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $46M), owner earnings is nearer $252M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? +$230M

Net cash, debt-free

Cash $230M − debt $0

What this means
Cash and short-term investments exceed every dollar of debt by $230M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital —

Not enough data

Industry peers: median 20%

What this means
The filing data didn't include the inputs for this check.
Owner-earnings margin 5%

Thin, recently turned positive

latest $298M = operating cash $336M − maintenance capex $37M; positive each of the last 3 years, after an earlier loss stretch (8-yr median 5%)

Industry peers: median 4%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 5% of revenue this year, a 5% median across 8 years. Treating stock comp as the real expense it is (less $46M of SBC) leaves $252M.
Are earnings backed by cash? 0.78×

Mostly cash-backed

Cash from ops $336M ÷ net income $429M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 204%

Returned more than it generated

Dividends + buybacks $610M ÷ Owner Earnings $298M

What this means
The company returned more than it generated: against $298M of Owner Earnings, $610M (204%) went back to shareholders, $69M dividends, $541M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $46M stock comp, the real buyback was about $495M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 1.30×

Expanding

Capex $48M ÷ depreciation $37M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 4 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $6.2B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity —

Current ratio ≥ 2× · —

What this means
Current assets / liabilities not in the data yet.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +267%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $9.10/share (latest year $6.99), the averaged base the calculator's gate runs on, and book value is $63.63/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Operating margin 6% → 11% (3-yr avg ends)

In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

What this means
Through the cycle the operating margin widened — about 6% early to 11% lately, median 9% — pricing power intact or improving.
Owner earnings growth +5%/yr

What this means
Owner earnings grew about 5% a year over the record.
Worst year 2016 · 4.2% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −3.6%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

How the cash was used, 2018–2025

Over the record, the business generated $2.7B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$284M · 10%
Dividends$371M · 14%
Buybacks$1.7B · 62%
Retained (debt / cash)$376M · 14%

Returned to owners$2.1B
83% of the owner earnings the business produced over the span, $371M as dividends and $1.7B as buybacks.
Average price paid for buybacks—
Buybacks ran $1.7B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−37.4%
The diluted count fell from 101M to 63M, so the buybacks outran the stock issued to staff.
Dividend record$0.99/sh
Paid in 8 of the years on record, the per-share dividend growing about 41% a year. It was never cut over the span.
Return on what it retained18%
Of the earnings it kept rather than paid out ($1.7B over the span), annual owner earnings (first three years vs last three) grew $315M, so each retained $1 added about 0.18 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Mezger	$14.4M	$25.1M	($66M)
2022	Mr. Mezger	$15.8M	$12.2M	$151M
2023	Mr. Mezger	$15.7M	$43.7M	$1.0B
2024	Mr. Mezger	$16.7M	$51.0M	$323M
2025	Mr. Mezger	$14.7M	−$4.4M	$298M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$46M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 13% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why KB Home is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 3 tests turned up something to look into; the other 2 came back clean.

Look hereDid reported profit become cash?0.84×
Across the record the business reported $4.1B of net income but generated $3.4B of operating cash, a 0.84-to-one conversion. Profit that does not turn into cash over many years is the classic mark of earnings that are softer than they look. Ask where the gap sits, receivables, inventory, or costs being capitalized rather than expensed.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Homebuilders

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
TOLToll Brothers Inc.	$11.0B	22%	11.6%	13%	9%
NVRNVR Inc.	$10.3B	—	16.0%	76%	12%
TMHCTaylor Morrison Home Corporation	$8.1B	20%	9.1%	8%	10%
KBHKB Home	$6.2B	—	8.8%	15%	5%
MHOM/I Homes Inc.	$4.4B	23%	11.0%	20%	3%
DFHDream Finders Homes Inc.	$4.3B	16%	7.8%	41%	3%
CCSCentury Communities Inc.	$4.1B	—	7.9%	6%	-1%
ECGEverus Construction Group Inc.	$3.7B	12%	6.7%	29%	4%
Group median	—	—	8.9%	17%	4%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what KB Home has delivered.

Today’s price $

Through the cycle, KB Home earns about $299M on its 4.8% median owner-earnings margin. This year’s 4.8% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($299M) Net of stock comp (−$41M) Steady-state · maintenance capex ($371M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+64%/yr

Owner-earnings growth · ’18→’25+5%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $360M on 61M shares outstanding, per the 10-Q cover, as of 2026-05-31; net cash $201M. The if-converted diluted count is 63M, 3% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($49M) runs well above depreciation ($40M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $371M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh KBH against another business →

Cite: Owner Scorecard, "KB Home (KBH), the owner's record," https://ownerscorecard.com/c/KBH, data as of 2026-07-09.

Manual order: ← KALU its page in the Manual KBR →

Industry order: ← HOV the Homebuilders chapter LEGH →