Century Communities (CCS) Stock Forecast & Price Target

Century Communities Inc. is experiencing an increase in customer incentives, projected to rise from 900 basis points in the first quarter of FY25 to approximately 1,100 basis points in the second quarter, which may impact gross margins for the second half of FY25. The company’s forecasts incorporate expectations that mortgage rates and incentives will stabilize through the fiscal year ending 2025, alongside anticipated increases in lumber prices later in 2025. Despite a downward adjustment in gross margin estimates to 18.6% for FY25 and 17.9% for FY26, the overall outlook remains favorable due to the company’s strong focus on developing and constructing single-family homes across its key operating segments, particularly within the revenue-generating Mountain segment.

Century Communities Inc. has experienced a significant decline in earnings per share (EPS), reporting $1.26 for F1Q25 compared to $2.00 in the same quarter the previous year, which also fell short of forecasts of $1.79. The company's financial services segment has seen its revenue and profit margin assumptions reset to align with F1Q25 levels, resulting in a reduction of approximately $0.50 per share in EPS estimates for both FY25 and FY26. Additionally, the company faced a 23% year-over-year decrease in monthly closings per community, maintaining a rate of 2.4/month, which raises concerns about sales performance and overall demand in the market.