KB Home and Intuitive Surgical Chart Divergent Paths: What 2026 Holds for Investors

As the investment landscape shifts in 2026, two companies represent starkly different trajectories in their respective sectors. Intuitive Surgical continues its growth momentum in medical robotics, while KB Home confronts persistent challenges in a softening housing market. Recent earnings reports and analyst revisions paint a complex picture for investors navigating these industries—one of sustained innovation-driven expansion, the other of cyclical pressure and margin compression.

Intuitive Surgical’s Robotic-Assisted Surgery Dominance Continues

Intuitive Surgical reported another strong quarter, extending its track record of beating analyst expectations. On January 22, 2026, the company announced fourth-quarter 2025 earnings of $2.53 per share, surpassing the Zacks Consensus estimate of $2.25 by $0.28. This marks the twelfth consecutive quarter of earnings beats—a testament to consistent execution.

The da Vinci surgical system remains the undisputed leader in robotic-assisted, minimally invasive surgery. During Q4, worldwide procedures using both the da Vinci and Ion platforms grew approximately 18% year-over-year. The da Vinci procedure count rose 17%, while the newer Ion endoluminal system surged 44%, signaling traction in new procedure categories. The company placed 532 da Vinci systems in the quarter, compared to 493 in the prior year, bringing the total installed base to 11,106 systems as of December 31, 2025—a 12% increase from 9,902 systems a year earlier.

Revenue climbed 19% to $2.87 billion from $2.41 billion, supported by higher procedure volumes, increased system placements, and a growing installed base. The Ion system also expanded its footprint, with the installed base reaching 995 systems, up 24% from 805 systems year-over-year.

Despite this strong performance, management guided for da Vinci procedure growth of 13% to 15% in 2026, down from 18% in 2025—a deceleration that warrants attention. After two decades as a premier growth stock, the company’s trajectory appears to be normalizing, though analysts remain constructive. Eight out of nine analyst estimates were raised in the past week for 2026 earnings, pushing the Zacks Consensus to $10.01 from $9.61. This implies 12.1% earnings growth on a 2025 base of $8.93 per share. For 2027, six estimates were revised upward, lifting the consensus to $11.33 from $11.00, representing 13.3% growth.

The stock trades at a forward price-to-earnings multiple of 52 and carries a PEG ratio of 3.3, indicating premium valuation. However, no competitor has broken Intuitive Surgical’s stronghold on the robotic-assisted surgery market. For investors seeking exposure to durable, innovation-driven growth, recent share weakness may present an entry point—though valuation remains a consideration.

KB Home Navigates Persistent Housing Market Headwinds

In stark contrast, KB Home faces mounting headwinds in the residential construction sector. On December 18, 2025, the company reported fourth-quarter earnings of $1.92 per share, beating the Zacks Consensus of $1.79. However, this narrow beat masks deeper structural challenges plaguing the industry.

KB Home, one of America’s largest homebuilders with a presence in 49 markets and nearly 700,000 homes built over 65 years, delivered 3,619 homes in the quarter—a 9% decline from the prior year. More concerning, the average selling price fell 7% to $465,600, while housing gross profit margin contracted sharply to 17% from 20.9% a year earlier. This margin compression reflects price reductions, elevated land costs, and unfavorable geographic mix—dynamics that signal fundamental market stress.

For the full year, homes delivered fell 9% to 12,902, with revenue declining to $6.24 billion from $6.93 billion in 2024. Net orders plummeted 10% to 2,414 in Q4, and the ending backlog of 3,128 homes represents only 71% of the 4,434-home backlog from a year prior. These metrics underscore deteriorating demand visibility.

KB Home’s 2026 first-quarter guidance offered little reassurance. Deliveries are projected at 2,300 to 2,500 homes, with housing gross profit margin expected to further compress to a range of 15.4% to 16%. The company holds $1.43 billion in total liquidity, including $228.6 million in cash and $1.2 billion in available credit capacity—adequate but not exceptional given the operational challenges ahead.

Analyst sentiment has turned decidedly bearish. Five earnings estimates were cut in the past 60 days, with two revisions in the most recent 30 days. The Zacks Consensus for 2026 has collapsed to $4.14 from $4.55 just 30 days ago and $6.33 sixty days prior—a stunning 36.5% downward revision. This represents KB Home’s second consecutive year of declining earnings, a troubling pattern.

The stock does trade cheaply, with a forward P/E of 14, and management has authorized $1 billion in share repurchases ($900 million remaining) plus a $1.00 dividend yielding 1.7%. These shareholder-friendly actions, implemented in October 2025, show management confidence. Yet sinking earnings fundamentals warrant caution. Most potential investors should await evidence of stabilization in the housing cycle and KB Home’s earnings trajectory before committing capital.

Divergent Industry Dynamics: The Broader Picture

While Intuitive Surgical benefits from demographic tailwinds, procedural innovation, and limited competition, KB Home is ensnared in a cyclical downturn characterized by consumer hesitation, rising relative costs, and margin pressure. This divergence mirrors broader market dynamics: innovation-driven healthcare and robotics command premium valuations and sustained growth, while cyclical housing absorbs near-term macro headwinds.

The data reinforces a fundamental truth: Intuitive Surgical operates in a secular growth industry with entrenched competitive advantages, justifying elevated multiples despite recent weakness. KB Home, by contrast, faces cyclical pressures that have yet to show signs of abating. For investors, the choice between these two narratives hinges on risk tolerance and time horizon.