DCF Tool

KBH

KB Home – New Single-Family Housing Construction (except For-Sale Builders)
KB Home is one of the largest homebuilders in the United States, with more than 600,000 homes delivered since its founding in 1957. KB Home operates in 38 markets in eight states, primarily serving first-time and first move-up homebuyers, as well as second move-up and active adults. KB Home is differentiated in offering customers the ability to personalize what they value most in their home, from choosing their lot, floor plan, and exterior, to selecting design and décor choices in its KB Home Studios. In addition, its industry leadership in sustainability helps to lower the cost of homeownership for its buyers compared to a typical resale home. The company takes a broad approach to sustainability, encompassing energy efficiency, water conservation, healthier indoor environments, smart home capabilities and waste reduction. KB Home is the first national builder to have earned awards under all of the U.S. EPA's homebuilder programs - ENERGY STAR®, WaterSense® and Indoor airPLUS®.
Analysis Results
Intrinsic Value $4,354.93
Latest Price $36.75
Relative Value 99% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 51.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 2.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 51.8%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 2.4 2.35
2024 3.64 3.49
2025 5.53 5.18
2026 8.39 7.7
2027 12.7 11.4
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 382 billion. This corresponds to a present value of 336 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 30.1 billion. Adding in the terminal value gives a total present value of 366 billion.

There are presently 84.0 million outstanding shares, so the intrinsic value per share is 4354.93.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 6,199,616,000
Current Cash 328,517,000
Current Liabilities 1,152,624,000
Current Debt 0
Non-Cash Working Capital (NCWC) 4,718,475,000
Change in NCWC 739,333,000
EBIT 1,074,960,000
Tax Provision 255,400,000
Depreciation and Amortization 32,319,000
Capital Expenditure -45,234,000
Unlevered Free Cash Flow 1,545,288,557
Current Assets 5,401,322,000
Current Cash 290,764,000
Current Liabilities 1,131,416,000
Current Debt 0
Non-Cash Working Capital (NCWC) 3,979,142,000
Change in NCWC 749,172,000
EBIT 699,372,000
Tax Provision 130,600,000
Depreciation and Amortization 28,640,000
Capital Expenditure -39,399,000
Unlevered Free Cash Flow 1,306,428,836
Current Assets 4,854,658,000
Current Cash 681,190,000
Current Liabilities 943,498,000
Current Debt 0
Non-Cash Working Capital (NCWC) 3,229,970,000
Change in NCWC 156,650,000
EBIT 361,489,000
Tax Provision 67,800,000
Depreciation and Amortization 28,396,000
Capital Expenditure -28,841,000
Unlevered Free Cash Flow 450,369,661
Current Assets 4,410,747,000
Current Cash 453,814,000
Current Liabilities 883,613,000
Current Debt 0
Non-Cash Working Capital (NCWC) 3,073,320,000
Change in NCWC 119,814,000
EBIT 352,817,000
Tax Provision 79,400,000
Depreciation and Amortization 27,158,000
Capital Expenditure -40,459,000
Unlevered Free Cash Flow 378,871,409
Current Assets 4,453,673,000
Current Cash 574,359,000
Current Liabilities 925,808,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,953,506,000
Change in NCWC 234,311,000
EBIT 364,451,000
Tax Provision 197,600,000
Depreciation and Amortization 2,530,000
Capital Expenditure -7,370,000
Unlevered Free Cash Flow 398,209,044
Current Assets 4,230,184,000
Current Cash 720,630,000
Current Liabilities 790,359,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,719,195,000
Change in NCWC -150,046,000
EBIT 295,062,000
Tax Provision 109,400,000
Depreciation and Amortization 2,791,000
Capital Expenditure -8,085,000
Unlevered Free Cash Flow 28,410,484
Current Assets 4,229,657,000
Current Cash 592,086,000
Current Liabilities 768,330,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,869,241,000
Change in NCWC 98,269,000
EBIT 154,686,000
Tax Provision 43,700,000
Depreciation and Amortization 3,637,000
Capital Expenditure -4,784,000
Unlevered Free Cash Flow 206,536,070
Current Assets 4,029,015,000
Current Cash 559,042,000
Current Liabilities 699,001,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,770,972,000
Change in NCWC 8,072,000
EBIT 148,441,000
Tax Provision 42,400,000
Depreciation and Amortization 3,411,000
Capital Expenditure -4,677,000
Unlevered Free Cash Flow 105,705,518
Current Assets 3,704,381,000
Current Cash 356,366,000
Current Liabilities 585,115,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,762,900,000
Change in NCWC 891,113,000
EBIT 125,256,000
Tax Provision -823,400,000
Depreciation and Amortization 2,420,000
Capital Expenditure -5,795,000
Unlevered Free Cash Flow 1,012,994,000
Current Assets 2,908,933,000
Current Cash 530,095,000
Current Liabilities 507,051,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,871,787,000
Change in NCWC 559,690,000
EBIT 100,261,000
Tax Provision -1,600,000
Depreciation and Amortization 1,857,000
Capital Expenditure -2,391,000
Unlevered Free Cash Flow 659,417,000
Current Assets 2,298,939,000
Current Cash 524,765,000
Current Liabilities 462,077,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,312,097,000
Change in NCWC -27,916,000
EBIT -9,767,000
Tax Provision -20,100,000
Depreciation and Amortization 1,622,000
Capital Expenditure -1,749,000
Unlevered Free Cash Flow -37,810,000

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