What to Expect From Century Communities' (CCS) Q1 Earnings?
Century Communities, Inc. CCS is slated to report first-quarter 2020 results on Apr 29, after market close.
In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 18.1% and 6.7%, respectively. Also, the metrics improved 44% and 14.8%, respectively, on a year-over-year basis. The uptrend was mainly driven by a 22% increase in deliveries.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged at 64 cents per share over the past 60 days. The said figure indicates a 6.7% increase from the year-ago earnings of 60 cents per share. The consensus mark for revenues is $550.05 million, suggesting a 3.2% year-over-year improvement.
Century Communities, Inc. Price and EPS Surprise
Century Communities, Inc. price-eps-surprise | Century Communities, Inc. Quote
Factors to Note
Housing market fundamentals mostly remained solid throughout first-quarter 2020, given low mortgage/interest rates and strong demand owing to limited supply of homes at affordable prices across most of the markets served by builders. However, widespread coronavirus outbreak began to affect business operations in late March, stretching into April. Softness in homebuying demand due to general market uncertainty is expected to have weighed on its quarterly revenues to some extent.
On an encouraging note, Century Communities’ focus on growing demand for entry-level and first-move-up buyers is expected to reflect on first-quarter 2020 results. The successful execution of strategic initiatives such as lowering home prices to meet the need of affordable homes is also expected to reflect on its results in the quarter to be reported. Also, efforts to drive growth with a primary emphasis on organic revenue expansion through increasing market penetration bode well.
This notable homebuilding company exclusively focuses on growth and market expansion, primarily through acquisitions.
The Zacks Consensus Estimate for the company’s home sales revenues is currently pegged at $539 million, implying 3.1% year-over-year growth.
The consensus mark for net new home contracts is 2,364 homes, which indicates growth of 27.2% year over year. The same for home deliveries is pegged at 1,729 units, suggesting improvement of 4% year over year. The consensus estimate for backlog is pegged at 2,693 home, implying a 13.3% increase from the year-ago period. The same for the value of backlog is $881 million, pointing to growth of 22.7% year over year.
In order to meet affordability concerns, the company reduced the average sales price for homes. Although this strategy is likely to have improved buyers traffic, the same is expected to have weighed on its performance.
The Zacks Consensus Estimate for average sales price is currently pegged at $312, implying 1% decrease from the year-ago period.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Century Communities this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Century Communities has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #5 (Strong Sell).
Stocks Worth a Look
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
GCP Applied Technologies Inc. GCP has an Earnings ESP of +38.46% and carries a Zacks Rank #3.
Masco Corporation MAS has an Earnings ESP of +10.73% and carries a Zacks Rank #3.
frontdoor, inc. FTDR has an Earnings ESP of +9.76% and holds a Zacks Rank #3.
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