KBH Earnings Signal (2025-06-23)
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KBH Earnings Analysis Summary (2025-06-23)
KB Home (KBH) Earnings Options Trade Analysis
1. Historical Earnings Analysis
Average Earnings Move Magnitude: Historically, KBH exhibits high volatility surrounding earnings announcements, with typical moves averaging around 6-8%. The current implied move based on options data suggests a potential post-earnings shift of approximately 5-9%. Directional Bias: Most recent earnings have been mixed, with the last four quarters showing KBH has missed revenue estimates in three instances but beat EPS estimates consistently. Current revenue expectations indicate a decline of -5.2%, which may negatively affect market sentiment. Management Guidance Credibility: Recent reports state expectations of "choppy" results, indicating potential layoffs or reluctance to meet forecasts. Moderate credibility (risk rating of 2/10) suggests investors should be cautious regarding management's forward guidance. IV Crush Patterns: Following earnings, options typically face a decline in volatility, with post-announcement IV crush ranging between 30-50%. This should necessitate a directional bias to compensate for potential premium decay.
2. Current Setup Evaluation
Pre-Earnings Price Action: KBH is trading at $51.75, below its 50-day MA ($52.88) and 200-day MA ($67.30). Volume has surged to 1.59 times its average, indicating heightened trading activity leading to earnings reporting. Options Chain Analysis: The options market exhibits a pronounced bearish skew, with much higher open interest and volume among put options, particularly the $50.00 strike (Ask volume at 591 versus 6 for bid). This indicates a sentiment preference for downside protection. Current Implied Volatility (IV): The VIX stands at 20.62, indicating elevated but manageable volatility levels in the market context. This may positively impact premiums before IB decay leading to the earnings report. Put/Call Ratio: Bearish signals present due to the high demand for puts compared to calls, corroborating a generally negative sentiment towards the upcoming announcement.