In the first quarter, the company reported revenues of $903.2 million, which fell short of the anticipated $912.42 million. Dale Francescon, Executive Chairman, attributed this shortfall to heightened economic uncertainty and volatility in interest rates, which have dampened consumer confidence and affected the typically robust spring selling season.
Despite these adversities, the company managed to secure 2,692 new home contracts and delivered 2,284 homes. The homebuilding segment posted a gross margin of 20.1%, a slight sequential decline of 80 basis points. The community count witnessed a significant growth of 26% year-over-year, reaching a total of 318. CEO Rob Francescon emphasized that the firm’s land pipeline, with 55% of lots controlled, positions them well for future growth while also mitigating potential risks.
On the financial front, the company maintains a robust balance sheet with $2.6 billion in stockholders' equity and $788 million in liquidity. Furthermore, the book value per share increased by 11% from the previous year, now standing at $84.41. Demonstrating confidence in its financial health, the company repurchased 753,337 shares for $55.6 million and raised its quarterly cash dividend to 29 cents per share.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for Century Communities Inc (CCS, Financial) is $96.00 with a high estimate of $96.00 and a low estimate of $96.00. The average target implies an upside of 59.81% from the current price of $60.07. More detailed estimate data can be found on the Century Communities Inc (CCS) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Century Communities Inc's (CCS, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Century Communities Inc (CCS, Financial) in one year is $82.93, suggesting a upside of 38.06% from the current price of $60.07. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Century Communities Inc (CCS) Summary page.
Key Business Developments
Release Date: January 29, 2025
- Full Year Deliveries: Increased 15% year over year to 11,007 homes.
- Community Count: Increased 28% year over year to 322 communities.
- Fourth Quarter Deliveries: 3,198 homes, a quarterly record.
- Home Sales Revenue: $1.2 billion for the fourth quarter, a quarterly record.
- Adjusted Gross Margin: Increased by 80 basis points to 23.3% for the full year 2024.
- SG&A as a Percentage of Revenue: Reduced by 40 basis points for the full year 2024.
- Adjusted Net Income: Increased by 36% year over year for the full year 2024.
- Fourth Quarter Adjusted Net Income: Up 18% year over year.
- Net New Contracts: Fourth quarter increased by 5% year over year to 2,467.
- Average Sales Price: Approximately $390,000 for both the fourth quarter and full year 2024.
- Fourth Quarter Pretax Income: $135.2 million.
- Fourth Quarter Net Income: $102.7 million or $3.20 per diluted share.
- Fourth Quarter Adjusted Net Income: $112 million or $3.49 per diluted share.
- Fourth Quarter EBITDA: $160.2 million.
- Fourth Quarter Adjusted EBITDA: $172.6 million.
- Backlog of Sold Homes: 850 units valued at $351.2 million.
- Fourth Quarter Homebuilding Gross Margin: 20.6%.
- SG&A as a Percent of Home Sales Revenue: 11.5% in the fourth quarter.
- Financial Services Revenue: $26.2 million in the fourth quarter.
- Fourth Quarter Tax Rate: 24%.
- Net Homebuilding Debt to Net Capital Ratio: Improved to 27.4% at quarter end.
- Book Value Per Share: $84.65, a 13% year-over-year increase.
- Stockholders' Equity: $2.6 billion at quarter end.
- Liquidity: $918 million at quarter end.
- 2025 Delivery Guidance: Expected to be in the range of 11,700 to 12,400 homes.
- 2025 Home Sales Revenue Guidance: Expected to be in the range of $4.5 billion to $4.8 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Century Communities Inc (CCS, Financial) achieved record deliveries of 11,007 homes in 2024, a 15% increase year over year.
- The company set a new record with a community count of 322, marking a 28% increase from the previous year.
- Adjusted net income for the full year increased by 36%, with a fourth-quarter rise of 18%.
- Century Communities Inc (CCS) successfully reduced SG&A as a percentage of wholesale revenues by 40 basis points.
- The company repurchased over 3% of its outstanding shares and increased its quarterly dividend by 30% in 2024.
Negative Points
- The average sales price remained flat at approximately $390,000, indicating potential challenges in increasing home prices.
- Incentives on new orders increased to approximately 900 basis points in the fourth quarter, reflecting pressure to maintain sales pace amid elevated mortgage rates.
- The first quarter of 2025 is expected to see a sequential decline in deliveries due to typical seasonality.
- Homebuilding gross margin decreased to 20.6% in the fourth quarter, down from 21.7% in the prior quarter.
- The company anticipates a potential impact on gross margins from mortgage rates and incentive levels in the near term.
