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Century Communities (CCS)
NYSE:CCS
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Century Communities
(NYSE:CCS)
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Rating:63Neutral
Price Target:
$77.00
▲(7.17% Upside)
Action:DowngradedDate:01/30/26
CCS scores in the low-to-mid 60s primarily due to a clear financial downshift in 2025 (lower revenue, margins, and ROE) despite improving leverage and positive but variable cash flow. The latest earnings call was constructive on operations, liquidity, and 2026 delivery outlook, but margin pressure from incentives and near-term demand uncertainty temper confidence. Valuation is supportive (P/E ~13 with a ~1.8% yield), while technicals are mixed with neutral momentum.
Positive Factors
Large owned and controlled lot base
A 61,000‑lot inventory gives Century durable supply optionality, enabling ~10% annual delivery growth without immediate land buys. That reduces land acquisition risk, smooths production planning and supports medium‑term revenue growth if demand recovers, a structural long‑term advantage.
Improving leverage, strong liquidity and shareholder returns
Material balance‑sheet repair and ample liquidity strengthen resilience through housing cycles. Lower net homebuilding leverage and $1.1B liquidity preserve financial flexibility for land funding, working capital and opportunistic buybacks, supporting long‑term capital allocation optionality.
Operational efficiency and cost reductions
Sustained reductions in direct costs, faster cycle times and lower spec inventory structurally boost per‑unit margins and cash conversion. These operational gains improve throughput and margin resilience across cycles, helping protect profitability even with modest demand or ASP pressure.
Negative Factors
Elevated incentives compressing margins
Very high incentives (≈1,300bps) are a structural drag on ASP and homebuilding margins. Management only projects modest improvement absent better market conditions, so persistent incentive dependence could keep gross and net margins below historical norms and hinder ROE recovery over the medium term.
2025 revenue and margin downshift
The sharp 2025 decline in revenue and margins signals a structural earnings reset versus prior-cycle peaks. Lower net margin and ROE imply reduced capital efficiency and profitability, making recovery dependent on sustained demand improvement or permanent cost structure gains to restore historical returns.
Inconsistent cash generation and FCF volatility
Irregular operating and free cash flow across years undermines predictability for dividends, buybacks, and land funding. Choppy working capital swings typical of homebuilders can constrain sustained capital returns or force opportunistic financing in weak years, weakening long‑term financial flexibility.
Century Communities (CCS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.13B
Dividend Yield1.99%
Average Volume (3M)239.37K
Price to Earnings (P/E)15.1
Beta (1Y)0.72
Revenue Growth-6.28%
EPS Growth-31.55%
CountryUS
Employees1,873
SectorReal Estate
Sector Strength53
IndustryResidential Construction
Share Statistics
EPS (TTM)1.59
Shares Outstanding29,050,514
10 Day Avg. Volume240,832
30 Day Avg. Volume239,370
Financial Highlights & Ratios
PEG Ratio-0.23
Price to Book (P/B)0.69
Price to Sales (P/S)0.43
P/FCF Ratio14.32
Enterprise Value/Market Cap1.60
Enterprise Value/Revenue0.83
Enterprise Value/Gross Profit4.68
Enterprise Value/Ebitda14.94
Forecast
1Y Price Target
$72.00Price Target Upside0.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Century Communities Business Overview & Revenue Model
Company DescriptionCentury Communities, Inc., together with its subsidiaries, engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. It is also involved in the entitlement and development of the underlying land; and provision of mortgage, title, and insurance services to its home buyers. The company offers homes under the Century Communities and Century Complete brands. It sells homes through its sales representatives, retail studios, and internet, as well as through independent real estate brokers in 17 states in the United States. Century Communities, Inc. was founded in 2002 and is headquartered in Greenwood Village, Colorado.
How the Company Makes MoneyCentury Communities generates revenue primarily through the sale of newly constructed homes, which represents its core business. The company builds homes in various communities, catering to different market segments, from entry-level to move-up buyers. Key revenue streams include home sales, which encompass both the sale of properties and the revenues from optional upgrades and customizations. Additionally, the company earns income from its land development activities, where it prepares land for residential construction. Century Communities also operates a mortgage lending arm, providing financing solutions to homebuyers, which contributes to its overall profitability. Strategic partnerships with land developers and suppliers further enhance its operations and cost efficiency, allowing the company to maintain competitive pricing and improve its profit margins.
Century Communities Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call balanced notable operational and financial progress against near-term market pressures. Highlights include record Q4 orders, meaningful operational efficiencies (shorter cycle times, lower construction costs, reduced spec inventory), strong cash generation ($153M operating cash) and a robust land position (61,000 lots) that provide optionality for ~10% annual delivery growth in 2026–2027. The company also strengthened its balance sheet, repurchased shares opportunistically, and achieved record mortgage capture rates. Lowlights center on elevated incentives (which compressed margins and reduced ASP), a Q4 inventory impairment ($10.9M), cautious early-2026 sales trends, and very low Q4 starts (29), leaving outcomes dependent on spring selling season and potential interest rate relief. On balance, the positive operational and balance-sheet developments outweigh the near-term margin and demand headwinds.Q4-2025 Updates
Positive Updates
Record Q4 Orders and Strong Sales Pace
Q4 net new contracts of 2,702 homes (company record), up 10% year-over-year and up 13% sequentially; absorption averaged 2.9 homes per community in Q4, +12% YoY and +16% sequential.
High Delivery Volume — Q4 and Full Year
Q4 residential deliveries of 3,435 units (3,030 new homes, 105 previously leased rental homes, 300 multifamily via Century Living); full-year 2025 residential deliveries totaled 10,792 homes.
Operational Efficiency Gains
Reduced direct construction costs on starts by an average of $13,000 per home; cycle times shortened by 13 days to 114 calendar days (down ~10% from 127 days a year ago); finished spec inventory down nearly 30%; direct construction costs on homes delivered in Q4 declined 4% sequentially.
Solid Financial Results and Cash Generation
Q4 pretax income $47M, net income $36M ($1.21 diluted EPS), adjusted net income $47M ($1.59 diluted EPS); home sales revenues of $1.1B in Q4 (up 16% sequentially); generated cash flow from operations of $153M in 2025 (up from $126M in 2024); record book value per share of $89.21.
Balance Sheet Strength and Shareholder Returns
Net homebuilding debt to net capital improved to 25.9% (from 31.4% in prior quarter); ending stockholders' equity $2.6B and liquidity $1.1B; repurchased >7% of shares outstanding in 2025 (2.3M shares at average $63.32, ~29% discount to book value), repurchased 334k shares in Q4 for $20M (~33% discount), and returned a record $178M to shareholders via dividends and repurchases; maintained quarterly dividend of $0.29.
Attractive Land Position and Growth Optionality
Approximately 61,000 owned and controlled lots at year-end; spent ~$1.2B on land acquisition and development in 2025 (similar to 2024); ability to grow deliveries by ~10% annually in 2026 and 2027 based solely on existing lot count; 26,000 option lots secured by $74M in nonrefundable deposits; 43% of owned land in finished lots and 32% in land under development; expected finished lot costs only 2–3% higher in 2026 vs Q4 2025.
Strong Financial Services Performance and Mortgage Capture
Financial services revenues of $25M in Q4 and pretax income of $8M; mortgage capture rate was a record 84% in both Q4 2025 and full-year 2025, supporting ancillary profitability.
SG&A and Cost Control
SG&A excluding commissions and advertising decreased ~5% year-over-year; company expects SG&A as a percent of home sales revenue roughly ~13% for full-year 2026 (benefit from ongoing cost reductions).
Negative Updates
Increased Incentives Weighing on Margins
Incentives on closed homes averaged roughly 1,300 basis points in Q4 (increased ~200 basis points QoQ) and materially pressured margins and ASP; management expects only up to a 50 basis point improvement from Q4 incentive levels in 2026 absent better market conditions.
GAAP Margin Impact and Inventory Impairment
GAAP homebuilding gross margin in Q4 was 15.4%, negatively impacted by 100 basis points from inventory impairment and 10 basis points from purchase price accounting; a $10.9M impairment charge in Q4 related to several closeout communities reduced GAAP profitability.
Early 2026 Sales Pace Uncertainty
January 2026 sales pace was slower year-over-year in the early weeks (although sequential order activity improved), creating some uncertainty around spring selling season momentum and the timing of a broader demand recovery.
Very Low Starts in Q4
Only 29 home starts in Q4, reflecting a deliberate pullback and focus on closeouts/older communities; low starts could limit near-term supply if market recovery is faster than expected and require quick ramping.
Elevated Q1 SG&A as Percent of Sales
SG&A as a percent of home sales revenue is expected to be ~14.5% in Q1 2026 (higher than full-year run-rate) driven by Q1 being a lower closing quarter and backlog/ASP dynamics.
Average Sales Price Decline
Average sales price in Q4 was $367,000, down ~5% quarter-over-quarter, largely driven by higher incentive levels and the mix shift toward closeout and older, higher-cost communities sold at pace.
Company Guidance
Century guided to full-year 2026 new-home deliveries of about 10,011 homes and home sales revenues of $3.6–$4.1 billion, with average open communities expected to rise in the mid-single-digit percent range and per-community absorption similar to 2025 (management also noted the ability to grow deliveries above the high end if absorption and market conditions allow); they see Q1 as the low point with deliveries of roughly 2,100–2,300 homes. For 2026 they expect SG&A of about 13% of home sales revenue (14.5% in Q1), incentives on closed homes to improve by up to 50 basis points from Q4 2025 levels (Q4 incentives averaged ~1,300 bps), adjusted homebuilding gross margin was 18.3% in Q4 (GAAP 15.4% including ~110 bps of impairment/PPA drag), mortgage capture was a record 84% (Q4 and FY2025), and the company expects a 2026 tax rate of 25–26%. They also reiterated financial flexibility and liquidity (ended Q4 with $2.6B equity, $1.1B liquidity, net homebuilding debt/net capital 25.9%), land capacity to support ~10% annual delivery growth in 2026–2027 based on existing lots, planned flat land spend (~$1.2B) in 2026, and finished lot costs expected only 2–3% higher versus Q4 2025.Century Communities Financial Statement Overview
Summary
Profitability and growth have weakened: 2025 revenue fell sharply and net margin compressed to ~3.6% from ~7.6% in 2024, with ROE down to ~5.7%. Positives include improving leverage (debt-to-equity ~0.43) and positive 2025 operating/free cash flow, but cash generation remains inconsistent across years.Income Statement
Revenue has been volatile, with a sharp decline in 2025 (annual) after growth in 2024, and profitability has compressed meaningfully: net margin fell to ~3.6% in 2025 from ~7.6% in 2024 and ~11–12% in 2021–2022. Gross margin has held relatively steady around ~21–22% recently but remains below the 2021–2022 peak (~25%). Overall, the business remains profitable, but the earnings trajectory has weakened materially versus prior-cycle highs.58
Neutral
Balance Sheet
Leverage looks manageable and improving: debt-to-equity declined to ~0.43 in 2025 from ~0.56 in 2024 and ~0.90 in 2020, supported by a larger equity base. Returns on equity, however, have cooled sharply to ~5.7% in 2025 versus ~12.7% in 2024 and ~24–28% in 2021–2022, signaling reduced efficiency/profitability in the current period. Balance sheet risk appears moderate, but returns have deteriorated.69
Positive
Cash Flow
Cash generation is mixed and choppy. Operating cash flow was positive in 2025 (~$153M) and 2024 (~$126M) but was very weak in 2023 and negative in 2021, reflecting working-capital swings typical of homebuilders. Free cash flow was positive in 2025 (~$124M) but down sharply versus 2024 (growth ~-39%), and free cash flow covered net income less convincingly in 2025 (~0.81x) than in stronger years. Overall, cash flow is positive lately but lacks consistency.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.12B | 4.40B | 3.69B | 4.51B | 4.22B |
| Gross Profit | 882.14M | 962.76M | 802.97M | 1.14B | 1.05B |
| EBITDA | 219.24M | 470.56M | 371.43M | 716.08M | 669.63M |
| Net Income | 147.60M | 333.82M | 259.22M | 525.13M | 498.50M |
Balance Sheet | |||||
| Total Assets | 4.49B | 4.53B | 4.17B | 3.79B | 3.51B |
| Cash, Cash Equivalents and Short-Term Investments | 158.01M | 150.00M | 328.00M | 353.29M | 368.61M |
| Total Debt | 1.44B | 1.48B | 1.30B | 1.23B | 1.35B |
| Total Liabilities | 1.89B | 1.91B | 1.78B | 1.64B | 1.74B |
| Stockholders Equity | 2.59B | 2.62B | 2.39B | 2.15B | 1.76B |
Cash Flow | |||||
| Free Cash Flow | 124.31M | 86.72M | -90.05M | 264.65M | -210.06M |
| Operating Cash Flow | 153.08M | 125.69M | 41.63M | 315.35M | -201.15M |
| Investing Cash Flow | 44.91M | -232.69M | -131.98M | -54.26M | -6.48M |
| Financing Cash Flow | -233.76M | 40.31M | 23.86M | -274.83M | 131.79M |
Century Communities Technical Analysis
Positive
71.85
Price Trends
65.13
Positive
62.95
Positive
61.05
Positive
Market Momentum
2.33
Negative
59.67
Neutral
50.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCS, the sentiment is Positive. The current price of 71.85 is above the 20-day moving average (MA) of 68.71, above the 50-day MA of 65.13, and above the 200-day MA of 61.05, indicating a bullish trend. The MACD of 2.33 indicates Negative momentum. The RSI at 59.67 is Neutral, neither overbought nor oversold. The STOCH value of 50.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CCS.
Century Communities Risk Analysis
Century Communities disclosed 83 risk factors in its most recent earnings report. Century Communities reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Century Communities Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.91B | 13.68 | 9.47% | ― | -16.60% | -29.85% | |
71 Outperform | $3.71B | 9.63 | 13.20% | ― | 4.77% | -9.30% | |
67 Neutral | $756.21M | 17.65 | 7.69% | ― | -0.84% | -76.30% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
63 Neutral | $2.13B | 15.06 | 8.37% | 1.99% | -6.28% | -31.55% | |
60 Neutral | $1.93B | 7.52 | 20.66% | ― | 15.95% | -6.86% | |
51 Neutral | $1.26B | 17.10 | 3.51% | ― | -20.62% | -45.74% |
* Real Estate Sector Average
CCS
Century Communities
71.85
2.44
3.52%
HOV
Hovnanian Enterprises
129.66
23.15
21.74%
MHO
M/I Homes
143.46
27.33
23.53%
TPH
Tri Pointe
46.31
14.86
47.25%
LGIH
LGI Homes
55.46
-20.53
-27.02%
DFH
Dream Finders Homes
20.49
-0.51
-2.43%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.