Century Communities (CCS) Stock Forecast & Price Target

Century Communities Inc. has demonstrated robust growth with a 29% year-over-year increase in home starts during the quarter, leading to year-to-date starts of 9,824 homes, which reflects a 25% rise year-over-year. The company reported total sales of $1.14 billion for F3Q24, marking a 28% increase compared to the previous year, driven by a strong 25% increase in closings and a rise in the average closing price to $394,000. Additionally, the company’s strategic acquisition of Anglia Homes contributed to a record community count of 305, alongside a 17% year-over-year increase in lot inventory, positioning Century Communities for further growth and profitability in 2025 and beyond.

Century Communities Inc. is facing a notable decline in its gross margin estimates, with a downward revision from 22.0% to approximately 21.6% for the second half of fiscal year 2024, raising concerns about future profitability in a challenging mortgage rate environment. The company's fiscal third quarter 2024 GAAP gross margin was reported at 21.7%, which is 390 basis points lower year-over-year than previously forecasted, suggesting ongoing pressures on its financial performance. Additionally, the potential for prolonged periods of declining real estate values and elevated commodity prices may exacerbate revenue challenges, compounded by difficulties in integrating acquired companies and increasing incentives on home sales.