Century Communities, Inc. (NYSE:CCS) just released its quarterly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$760m, some 9.5% above estimates, and statutory earnings per share (EPS) coming in at US$1.48, 59% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Century Communities after the latest results.
Taking into account the latest results, the consensus forecast from Century Communities' three analysts is for revenues of US$3.44b in 2021, which would reflect a meaningful 16% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 23% to US$6.21. In the lead-up to this report, the analysts had been modelling revenues of US$3.30b and earnings per share (EPS) of US$5.58 in 2021. So it seems there's been a definite increase in optimism about Century Communities' future following the latest results, with a substantial gain in the earnings per share forecasts in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of US$53.67, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Century Communities, with the most bullish analyst valuing it at US$64.00 and the most bearish at US$43.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Century Communities' revenue growth is expected to slow, with forecast 16% increase next year well below the historical 29%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) 9.3% next 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 most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Century Communities following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Century Communities going out to 2022, and you can see them free on our platform here..
Even so, be aware that Century Communities is showing 3 warning signs in our investment analysis , you should know about...
This article by Simply Wall St is general in nature. 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.
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