09:22 AM EST, 12/30/2024 (MT Newswires) -- KB Home ( KBH ) is expected to top Wall Street's estimates with its fiscal fourth-quarter earnings and record a double-digit gain in home deliveries for the period, Wedbush Securities said in a Monday client note.

The brokerage forecasts the homebuilder to report per-share earnings of $2.50 for its quarter ended Nov. 30, compared with the current consensus on FactSet for $2.45. Sales are projected to rise 19% year over year to $2 billion, in line with Wall Street estimates, according to Wedbush. Analysts polled by FactSet expect the company to post revenue of $1.99 billion.

KB Home ( KBH ) is scheduled to release its latest financial results next week. In the third quarter, the company reported EPS of $2.04 on revenue of $1.75 billion.

Wedbush's estimates assume a 14% annual increase in KB Home's ( KBH ) deliveries to 3,900 homes with a 5% rise in the average selling price to $510,000. The brokerage also anticipates the company's gross margin to increase by 30 basis points to 21.1% based on the assumption the company had to remain competitive with pricing and incentives in previous quarters.

The brokerage forecasts KB Home ( KBH ) to report a 10% year-over-year increase in orders to 2,100 homes in the fourth quarter, compared with the consensus for a 13% gain. In the prior three-month period, the company's orders missed Wedbush's expectations for a 10% increase due to competitive pressures from discounting and other challenges. "We see those same threats as a risk to our (fourth-quarter) estimates," Wedbush analysts Jay McCanless and Brian Violino wrote in the note.

Wedbush will also look for an update on the company's search process for a new chief financial officer. At the end of September, the company announced that Jeff Kaminski will retire as CFO in early 2025 after more than 14 years in the role.

During its third-quarter earnings call, KB Home's ( KBH ) senior management disclosed that the homebuilder anticipates about $7.5 billion in housing revenue for fiscal 2025. Wedbush estimates the metric to rise by 9% year over year on a 6% unit closing gain and an average closing price increase of 3% for the 2025 fiscal year.

The brokerage reiterated its neutral rating on KB Home's ( KBH ) stock with a 12-month price target of $75.