NEW YORK (TheStreet) -- Shares of KB Home are higher by 2.60% to $15.38 in mid-morning trading on Tuesday, as data from the Commerce Department showed new home sales grew by 7.8% to 539,000 annualized pace in February. New home sales increased the most last month since February 2008, Bloomberg reports, adding that the median forecast of 76 economists polled by the publication called for the pace to drop by 464,000. Job growth, soft but positive income growth, low mortgage rates, and gradually easing access to credit helped to boost new home sales in February, Gus Faucher a senior economist at PNC Financial Services Group told Bloomberg. "I would expect we'd see further gains over the course of this year," Faucher added. Other homebuilders on the rise today include Hovnanian Enterprises , up by 2.89% to $3.56, Lennar Corp. , gaining by 1.66% to $50.36, and D.R. Horton , up by 1.59% to $27.55 this morning. Separately, TheStreet Ratings team rates KB HOME as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation: "We rate KB HOME (KBH) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 28.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market, KB HOME's return on equity significantly exceeds that of both the industry average and the S&P 500. KB HOME's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KB HOME increased its bottom line by earning $9.03 versus $0.41 in the prior year. For the next year, the market is expecting a contraction of 90.0% in earnings ($0.90 versus $9.03). The change in net income from the same quarter one year ago has exceeded that of the Household Durables industry average, but is less than that of the S&P 500. The net income has significantly decreased by 26.2% when compared to the same quarter one year ago, falling from $10.56 million to $7.80 million. You can view the full analysis from the report here: KBH Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
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