Market Spotlight: Where Intuitive Surgical Rises and KB Home Faces a Reckoning in 2026

Zacks Investment Research has painted a stark contrast in the January 2026 market landscape: while Intuitive Surgical stands as a testament to sustained innovation and growth, KB Home finds itself wrestling with fundamental headwinds in an uncertain housing sector. These diverging trajectories highlight the importance of distinguishing between companies riding secular trends and those battling cyclical challenges.

Intuitive Surgical Extends Its Dominance in Robotic Surgery

Intuitive Surgical maintained its position as the undisputed leader in robotic-assisted surgery, delivering yet another quarter of impressive financial performance in Q4 2025. The company reported earnings of $2.53 per share, beating the Zacks Consensus estimate of $2.25—its twelfth consecutive quarterly beat. Revenue surged 19% year-over-year to $2.87 billion, driven by robust procedure volume and system placements.

The growth metrics tell a compelling story. Global da Vinci procedures climbed 17%, while the newer Ion endoluminal system saw an even more impressive 44% growth. The company placed 532 da Vinci surgical systems in Q4, up from 493 a year prior. More significantly, its installed base reached 11,106 systems as of December 31, 2025—a 12% increase—while the Ion installed base grew 24% to 995 systems.

Despite these gains, Intuitive Surgical guided for da Vinci procedure growth of 13-15% in 2026, marking a deceleration from 2025’s 18% expansion. This raises a natural question: is the growth story slowing? Not according to analysts. Eight revisions moved higher in the past week alone, pushing the 2026 Zacks Consensus to $10.01 earnings per share, implying 12.1% growth from 2025’s $8.93. For 2027, six upward revisions lifted the consensus to $11.33, forecasting another 13.3% increase.

The Valuation Question: Premium Pricing for Premium Growth

Intuitive Surgical shares have delivered 103% returns over five years, handily outpacing the S&P 500’s 87% gain. However, recent weakness—underperformance versus the broader index over the past twelve months—may present an entry point for long-term investors. The company commands a forward P/E of 52, reflecting its quality and growth trajectory. Its PEG ratio of 3.3, while elevated, remains justified given that no competitor has managed to dislodge da Vinci’s stranglehold on the robotic-assisted surgery market.

KB Home’s Low-Point Valuation Masks Deeper Housing Market Troubles

KB Home presents a starkly different picture. This Zacks Rank #5 (Strong Sell) homebuilder is navigating one of the sector’s most challenging periods, with 2026 shaping up to be the second consecutive year of earnings contraction. The company did beat Q4 2025 earnings expectations, reporting $1.92 versus a Zacks Consensus of $1.79, but the underlying trends remain troubling.

Homes delivered fell 9% year-over-year to 3,619 units in Q4, while average selling prices declined 7% to $465,600. More alarmingly, gross profit margins contracted to 17% from 20.9% a year earlier, squeezed by aggressive price reductions, elevated land costs, and an unfavorable geographic mix. For the full year 2025, deliveries totaled 12,902 homes, down 9%, with revenue declining to $6.24 billion from $6.93 billion in 2024.

The Backlog Collapse and Forward Guidance Reality Check

Net orders in Q4 fell 10% to just 2,414, while the ending backlog shrank to 3,128 homes from 4,434 homes. This dramatic backlog reduction signals weakening demand despite any seasonal patterns. KB Home’s Q1 2026 guidance offered little reassurance: expected deliveries of 2,300-2,500 homes and gross margins projected at 15.4-16%—a further contraction from Q4 levels.

The analyst community has responded decisively. Five earnings estimates were slashed in the past 60 days, with two cuts occurring in the prior 30 days. The 2026 Zacks Consensus for KB Home has plummeted to $4.14 from $4.55 just 30 days prior, and from $6.33 sixty days ago—a staggering 36.5% downward revision. The company earned $6.52 in 2025, making this decline even more pronounced.

From Low Valuations to Value Trap: The KB Home Dilemma

On the surface, KB Home might appear attractively valued. Trading at a forward P/E of just 14—typically considered a value threshold—and offering a 1.7% dividend yield on a $1.00 payout, the stock has also benefited from $100 million in share repurchases during Q4 2025, with $900 million remaining under a $1 billion authorization. The company projects $50-100 million in repurchases for 2026.

However, value investing demands a crucial additional criterion: stabilizing or growing earnings. KB Home fails that test. When a company’s earnings are contracting for a second consecutive year amid deteriorating margins and shrinking backlogs, attractive valuations can quickly transform into value traps. Investors eyeing homebuilders may be wise to wait for tangible signs of housing market recovery before committing capital.

The Broader Market Landscape: Gold Stocks and Growth Prospects

Beyond these two headline stories, AngloGold Ashanti, Kinross Gold, and Newmont are pursuing aggressive expansion strategies. AngloGold closed its Augusta Gold acquisition in October, bolstering its Nevada footprint with the Reward project. The company is investing heavily in its Geita mine, targeting a 60% increase in mineral reserves and mine life extension to over a decade by 2028.

Kinross Gold is progressing with its Advanced Exploration program at Great Bear in Ontario, having commissioned a natural gas pipeline and advancing detailed engineering. Newmont recently achieved commercial production at the Ahafo North project in Ghana, expected to generate 275,000-325,000 gold ounces annually over a 13-year mine life.

AngloGold Ashanti has emerged as the outperformer, with shares appreciating 331.8% in the past year—far exceeding the Zacks Mining-Gold industry rally of 176.9%. The company currently trades at a 12-month forward P/E of 16.65X, near the industry average of 14.62X, while sporting a Zacks Rank #1 (Strong Buy) rating. The 2026 Zacks Consensus projects 41.3% earnings growth.

Investment Takeaway: Growth, Margin Pressure, and Market Recovery Timing

The January 2026 market snapshots underscore a fundamental divergence: Intuitive Surgical exemplifies sustainable double-digit growth in a defensible market position, whereas KB Home mirrors the broader housing sector’s struggle with margin compression and demand uncertainty. While KB Home’s valuation may eventually become compelling—from low to high valuations require patience and evidence of recovery—today’s investor should demand more than cheap multiples before deploying capital in troubled sectors.