7 Stocks That Could Surge From LA Wildfires Recovery Efforts

4. KB Home (NYSE:KBH)

KB Home is one of those homebuilders that are poised to benefit from the industry-wide recovery expected in 2025. It is also the beneficiary of the housing under-supply, which has increased home prices, ultimately benefitting KBH. The company just confirmed this when it announced an earnings beat yesterday, causing the stock to soar after hours.

The firm’s revenues have grown at a CAGR of over 10% in the last 10 years. Its ROE has improved from 6.3% 8 years ago to 15.7% in 2023. However, investors should also note that the company’s gross margins are the second-lowest among its peers, so the improved ROE is still trailing most of its competitors. This will likely weigh on value realization in 2025, but the bull thesis still remains intact.

KB Home’s management is also actively buying back shares. Looking at it in the context of a monetary easing environment and a decrease in inflation, the housing market is set to make a comeback in 2025 and KB Home is ready to benefit from that.