KB Home. (KBH) is a homebuilding company that constructs and sells homes through its five operating segments, four of which are homebuilding segments and one financial services segment. The stock is currently trading around $14.91 at the middle of its 52 week range of $11.76-$18.98. The stock has been underperforming the market this year falling 9.85% year to date. KBH is scheduled to report earnings before the opening bell tomorrow, and the stock is up today roughly $0.05 or 0.34% on the session ahead of the close.

Over the past 11 quarters KBH has rallied on earnings day 6 times with an average move of 7.59%. The stock appears bullish on chart going into the release having traded above the Ichimoku Cloud for the past month on the daily bars. Over the past 11 quarters KBH has rallied from earnings to the nearest options expiration 6 times with an average move of 8.72%. The stock looks as if it could reverse its recent trend and rip to the upside in today’s session. Investors are mainly looking to see how recent strategies to boost revenue per community and per unit will fare. Also, the company has strived to build homes in a mix of geographic locations. Lastly, favorable macro-economic conditions is fueling price increases.

The options market is currently implying a move of around $0.89 or 6.00% in KBH by this Friday’s close giving us targets of $15.80 and $14.02.

Andrew Keene

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