Investment firm Wedbush has adjusted its price target for Century Communities (CCS, Financial), reducing it from $93 to $88 while maintaining a Neutral rating on the stock. The firm cites the current trends in the housing market, where national home and land prices continue to rise, as a mitigating factor for the company's valuation.
Despite these upward trends, Wedbush points out potential challenges facing Century Communities. Significant competition from larger builders focused on high-volume sales rather than profit margins may put pressure on CCS's sales momentum, gross margins, and stock performance in the near term.
Furthermore, the firm notes that consumer behavior appears to have been impacted by recent news events, following the Q1 earnings call, suggesting that their core consumer base has been hesitant to make purchasing decisions after recent volatile political announcements.
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 $88.00 with a high estimate of $88.00 and a low estimate of $88.00. The average target implies an upside of 46.50% 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.
CCS Key Business Developments
Release Date: April 23, 2025
- Home Sales Revenue: $884 million, down 4% year-over-year.
- Net Income: $39 million or $1.26 per diluted share.
- Adjusted Net Income: $42 million or $1.36 per diluted share.
- EBITDA: $73 million; Adjusted EBITDA: $76 million.
- Deliveries: 2,284 homes, a 3% decline year-over-year.
- Average Sales Price: $387,000, decreased by 1% year-over-year.
- Homebuilding Gross Margin: 19.9%; Adjusted Homebuilding Gross Margin: 21.6%.
- SG&A as a Percentage of Home Sales Revenue: 13.7%.
- Community Count: 318, up 26% year-over-year.
- Backlog: 1,258 homes valued at $521 million.
- Incentives on Closed Homes: Approximately 900 basis points.
- Net Homebuilding Debt to Net Capital Ratio: 30.1%.
- Dividend Increase: 12% to $0.29 per share.
- Share Repurchase: 753,000 shares for $56 million.
- Liquidity: $788 million.
- Credit Facility Increase: To $1 billion from $900 million.
- Full Year Home Delivery Guidance: 10,400 to 11,000 homes.
- Full Year Home Sales Revenue Guidance: $4 billion to $4.2 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Century Communities Inc (CCS, Financial) maintained relatively stable homebuilding gross margins of 20.1% despite economic headwinds.
- The company delivered 2,284 homes, only a 3% decline from the previous year, showcasing resilience in a challenging market.
- Century Communities Inc (CCS) has a strong land position with close to 80,000 owned and controlled lots, providing a solid foundation for future growth.
- The company was recognized on Newsweek's list of America's Most Trustworthy Companies for the third consecutive year.
- Century Communities Inc (CCS) increased its quarterly cash dividend by 12% to $0.29 per share, reflecting confidence in its financial stability.
Negative Points
- The absorption rate in the first quarter was weaker than expected due to economic uncertainty and interest rate volatility.
- Net new contracts declined by 6% compared to the previous year, indicating challenges in maintaining sales momentum.
- The company had to increase incentives on closed homes to approximately 900 basis points, impacting gross margins.
- Century Communities Inc (CCS) reduced its full-year home delivery guidance due to ongoing economic uncertainty and declining consumer confidence.
- The company made the difficult decision to rightsize its workforce and implement cost-saving programs due to a slower-than-expected spring selling season.
