Revenue Beat: Century Communities, Inc. Beat Analyst Estimates By 9.4%

Century Communities, Inc. (NYSE:CCS) defied analyst predictions to release its yearly results, which were ahead of market expectations. The company beat expectations with revenues of US$3.7b arriving 9.4% ahead of forecasts. Statutory earnings per share (EPS) were US$8.05, 7.0% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Century Communities

Taking into account the latest results, the current consensus from Century Communities' four analysts is for revenues of US$4.03b in 2024. This would reflect a notable 9.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 23% to US$10.00. In the lead-up to this report, the analysts had been modelling revenues of US$3.59b and earnings per share (EPS) of US$8.49 in 2024. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 12% to US$95.50per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Century Communities, with the most bullish analyst valuing it at US$110 and the most bearish at US$84.50 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Century Communities' revenue growth is expected to slow, with the forecast 9.1% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.7% per year. Even after the forecast slowdown in growth, it seems obvious that Century Communities is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Century Communities' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Century Communities analysts - going out to 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Century Communities (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.