Is KB Home overvalued or undervalued?

As of 14 November 2025, the valuation grade for KB Home has moved from expensive to very expensive, indicating a significant deterioration in its valuation outlook. Based on the current metrics, KB Home appears to be overvalued. The P/E ratio stands at 7, which is lower than the peer average, while the EV to EBITDA ratio is 7.43, also suggesting a premium compared to peers like Toll Brothers, Inc. with a P/E of 11.10 and Taylor Morrison Home Corp. at 10.67. Additionally, the PEG ratio of 0.77 indicates that the stock is priced attractively relative to its growth prospects, yet the overall valuation signals a concern.
In comparison to the S&P 500, KB Home has not provided return data, making it difficult to assess its performance relative to the broader market. However, the current valuation metrics and peer comparisons strongly suggest that KB Home is trading at a premium, reinforcing the conclusion of being overvalued.