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Century Communities (CCS) to Post Q1 Earnings: What's in Store?

·4 min read

Century Communities CCS is scheduled to report first-quarter 2021 results on Apr 28, after market close.

In the last reported quarter, the company’s sales and earnings beat the Zacks Consensus Estimate by 6.2% and 57.1%, and increased 24.6% and 66.7% on a year-over-year basis, respectively. Markedly, the company beat earnings expectations in the last four quarters, the average being 53.3%. The growth was driven by strong housing market demand trends, increased home delivery and appreciation in sale price.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has moved 33.3% up to $1.52 over the past 90 days. The estimated figure indicates an increase of 90% from 80 cents per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $796 million, suggesting 32.1% growth from the year-ago reported figure of $602.6 million.

Factors to Consider

The company’s earnings and revenues for first-quarter 2021 are expected to have improved on a year-over-year basis, backed by robust demand for new homes, including net new contracts and increased home deliveries. The uptick in home sales can be primarily attributed to increase in home deliveries. Century Communities is likely to have witnessed accelerated demand in the quarter to be reported.

The company is extending its business in the high-growth market and expects to generate operational efficiencies. For the to-be-reported quarter, Century Communities is focused on increasing its sale pace along with strong price appreciation, thereby driving its top line, expanding margins and boosting profitability. Also, a robust backlog level and increased number of controlled lots are likely to have supported increased deliveries, contracts and community count across Century Communities and Century Complete brands during the quarter.

The Zacks Consensus Estimate for Net New Home Orders at first quarter-end is pegged at 3,032, indicating 18.2% growth from the last reported quarter and 27% growth year over year. The consensus estimate for average sales price of home deliveries is pegged at $330 million, suggesting a decline of 1.5% sequentially. Notably, the consensus estimate for number of home delivered for the first quarter is pegged at 2,356 units, suggesting a 16.6% sequential decline from 2826 homes. Nonetheless, the estimated figure calls for 26.4% growth year over year.

However, the company is witnessing a rise in material costs that is likely to exert pressure on the company’s first-quarter margins as well.

Century Communities, Inc. Price and EPS Surprise

Century Communities, Inc. Price and EPS Surprise
Century Communities, Inc. Price and EPS Surprise

Century Communities, Inc. price-eps-surprise | Century Communities, Inc. Quote

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Century Communities this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Earnings ESP for Century Communities is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post earnings beat in their respective quarters to be reported.

Louisiana-Pacific Corporation LPX has an Earnings ESP of +11.8% and a Zacks Rank #1.

EMCOR Group, Inc. EME has an Earnings ESP of +10.3% and a Zacks Rank #2.

Meritage Homes Corporation MTH has an Earnings ESP of + 0.67% and a Zacks Rank #3.

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LouisianaPacific Corporation (LPX) : Free Stock Analysis Report

EMCOR Group, Inc. (EME) : Free Stock Analysis Report

Century Communities, Inc. (CCS) : Free Stock Analysis Report

Meritage Homes Corporation (MTH) : Free Stock Analysis Report

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