KBH - KB Home Can See ~30% Upside Over The Next 12 To 18 Months As Build-To-Order Headwinds Turn Into Tailwinds

KB Home (KBH) is an entry level homebuilder with ~55% of its deliveries to first-time home buyers, ~22% of its deliveries to first move-up buyers and rest 23% to second move-up and active adult buyers combined.

Recent Underperformance

While most of the homebuilders are making new highs post Covid-19 and entry level homebuilders are outperforming the industry, KB Home is still trading ~11% below its February 2020 highs. The company reported an impressive net order growth for July at 23%, but it was still much lower than over 50% yoy growth which