Earnings Beat Pushes Homebuilding Stock Higher

KB Home (NYSE:KBH) entered the earnings confessional yesterday to report a second-quarter earnings win of $2.32 per share, in addition to better-than-expected revenue of $1.72 billion. The homebuilding name noted it owns or controls the lots it needs to support delivery targets through 2024, but that sales are moderating due to higher mortgage interest rates and red-hot inflation.

Last seen up 6.6% at $27.96, the equity is bouncing off a June 17, two-year low of $24.78. The 80-day moving average has kept a tight lid on shares for most of 2022, though, while a ceiling at the $36 level has rejected multiple rallies since late March. Year-to-date, KBH is down 41.4%.

Analysts have kept mum since the earnings event, but are already bullish on KB Home stock. Of the 11 in question, 10 called it a "buy" or better, while the 12-month consensus target price of $41.29 is a 57.4% premium to current levels. Meanwhile, short interest is on the rise, up 15.1% in the last two reporting periods to account for 6.9% of the equity's available float. 

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KBH sports a 10-day put/call volume ratio of 7.63 that stands higher than all but 5% of readings from the past year. This means puts have been getting picked up at a much quicker-than-usual clip over the past two weeks.

The security's usually quiet options pits are brimming with activity today, with 2,221 calls and 3,004 puts exchanged so far, which is five times the intraday average. Most popular is the August 22 put, where new positions are being opened.