KB Home's Summer "Softening"

Plus, Stitch Fix loses active clients.

September 25, 2024

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Today is Wednesday, September 25, 2024.

The Early Bird Index today is 74.33.

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KB Home's Summer "Softening"

Homebuilder KB Home (NYSE: KBH) fell 6.04% in after-hours trading on Tuesday after revealing mixed financial earnings results amid an uneasy housing market.

Financials: KB Home reported earnings of $2.04 per share in the past quarter, which was lower than expected. Revenue reached $1.75 billion, which was better than expected.

Details: The number of homes delivered increased by 8% in the quarter and the average selling price rose by 3%, but there were many challenges during the summer.

Quote: “Net orders were flat with the year ago quarter. We experienced variability in demand across the quarter, with softening in late June through July, as buyers continued to evaluate elevated mortgage interest rates, and general economic concerns were rising. As rates moderated in August, our net orders improved.”- Jeffrey Mezger, CEO.

Early Bird’s Nest Egg Gains: Decreasing interest rates could stimulate housing demand significantly, potentially leading to a more active and competitive market.

  • Lower interest rates generally lead to increased affordability for homebuyers due to reduced monthly mortgage payments and increased purchasing power.

  • The improved affordability is expected to stimulate housing demand with more potential buyers entering the market.

Final Thoughts: KB Home was up 40% this year before these results.

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Notables

Notable Earnings Today: Micron Technology (Nasdaq: MU), Cintas (Nasdaq: CTAS), Concentrix (Nasdaq: CNXC), Jefferies (NYSE: JEF), H.B. Fuller (NYSE: FUL), Worthington Steel (NYSE: WS).

Notable IPOs Today: Texas Capital Funds Trust (NYSE: MMKT).

Notable Equity Crowdfunding Campaigns Ending Today: Sassafras (Honeycomb), NAVIX Health (StartEngine).

Notable Economic Events Today: Building Permits (8:30 a.m. ET), New Home Sales (10:00 a.m. ET), Crude Oil Inventories (10:30 a.m. ET).

Stitch Fix Loses Active Clients

Stitch Fix (Nasdaq: SFIX) plunged 23.21% in after-hours trading on Tuesday as investors were displeased with the online personal styling service’s financial results.

Financials: Stitch Fix reported revenue of $319.5 million, which was better than expected.

Details: Revenue fell 12.4% in the quarter and the company is still losing money.

Powering the Story: To make matters worse, the number of active clients fell by 4.7% since the previous quarter and 19.6% since last year.

Final Thoughts: The stock is down 80% in the last 5 years.

Cardano Jumps Amid Positive Sentiment

The price of the cryptocurrency Cardano rose by nearly 9% on Tuesday as investors bought more digital assets.

Details: One of the reasons behind the excitement of Cardano is that its founder is set to meet with the president of Argentina in October.

Final Thoughts: Cardano is up 59% in the last 12 months.

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The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.