Street Calls of the Week
Century Communities Inc. (NYSE:CCS) recently shared its investor presentation for April 2025, highlighting the company’s strategic focus on affordable housing and land-light operations. The presentation comes on the heels of the company’s Q1 2025 earnings report, which revealed mixed results with revenue slightly exceeding expectations but earnings per share falling short of forecasts.
Executive Summary
Century Communities, a national homebuilder operating in 17 states and over 45 markets, has positioned itself in the affordable housing segment with 94% of its home deliveries priced below FHA limits. The company operates through two complementary brands – Century Communities and Century Complete – with the latter focusing exclusively on entry-level buyers.
As shown in the following chart of the company’s growth trajectory, Century Communities has demonstrated substantial growth across key metrics since 2019:
Despite this impressive long-term growth, the company’s recent Q1 2025 results showed some challenges. Century Communities reported adjusted earnings per share of $1.36, missing the forecasted $1.76, while revenue came in at $903.2 million, slightly above expectations. Following the earnings announcement, CCS shares declined by 2.39% during regular trading hours and currently trade near $56.29, close to the 52-week low of $53.75.
Strategic Initiatives
Century Communities’ presentation emphasized its focus on affordable housing, a segment supported by demographic trends from Millennials and Gen Z. The company’s two-brand strategy allows it to target different segments of the affordable housing market:
A key component of Century Communities’ strategy is its land-light business model, which provides flexibility while reducing risk exposure. As of March 31, 2025, the company controlled 55% of its total 79,014 lots, up from 40% at the end of 2022. This approach allows Century Communities to adapt more quickly to changing market conditions.
The company also highlighted its spec-home construction approach, with 99% of total home deliveries built as spec homes. This strategy streamlines the construction process, reduces the time between contract and delivery, and allows buyers to purchase quick move-in homes while locking in mortgage rates.
Detailed Financial Analysis
Century Communities’ presentation showcased its strong historical financial performance, with total revenues increasing 72% from $2.5 billion in 2019 to $4.4 billion in the twelve months ending Q1 2025. Net income grew even more impressively, rising 173% from $113 million to $309 million during the same period.
However, the company’s Q1 2025 results revealed some current challenges. Home deliveries for the quarter totaled 2,284, representing a 3% decline from the previous year. Home sales revenues decreased 4% year-over-year to $884 million, with the average sales price declining 1% to $387,000.
Despite these short-term challenges, Century Communities maintains a strong balance sheet with significant liquidity of $788 million and a net homebuilding debt to net capital ratio of 30.1%. The company has also demonstrated a commitment to returning value to shareholders through steady dividend growth:
Geographic Diversification
Century Communities has built a geographically diverse business across the United States, with a strategic focus on high-growth markets. The company has top 10 market share positions in several major metropolitan areas including Atlanta, Charlotte, Denver, Houston, Las Vegas, Nashville, Phoenix, and Seattle.
This geographic diversification provides a natural hedge against regional market fluctuations and creates multiple avenues for growth. The company’s revenue is well-distributed across its operating regions:
Century Communities has expanded its footprint through strategic acquisitions, completing and integrating nine acquisitions since 2013. Most recently, the company acquired Landmark Homes of Tennessee and Anglia Homes, LP in Houston in 2024, further strengthening its presence in key markets.
Forward-Looking Statements
Despite current market headwinds, Century Communities remains optimistic about its long-term growth prospects. The company has set full-year guidance for home deliveries between 10,400 and 11,000 homes, with home sales revenue projected between $4.0 billion and $4.2 billion.
In the investor presentation, Century Communities highlighted several factors supporting its growth outlook:
During the Q1 2025 earnings call, management acknowledged the current challenges but remained confident in the company’s strategic positioning. Dale Francescon, Executive Chairman, noted that "despite the current headwinds, our deliveries of 2,284 homes were only 3% below year-ago levels," while CEO Rob Francescon added that the company is "taking the necessary steps to address the headwinds facing the market."
The contrast between Century Communities’ strong long-term growth trajectory and recent quarterly performance reflects broader challenges in the housing market, including economic uncertainty and interest rate volatility. However, the company’s focus on affordable housing, land-light strategy, and geographic diversification may position it well to navigate these challenges and capitalize on long-term demographic trends supporting housing demand.
With a current P/E ratio of just 5.75x and trading near its 52-week low, Century Communities may represent an opportunity for investors willing to look beyond short-term market fluctuations to the company’s long-term growth potential in the affordable housing segment.
Full presentation:
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