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Here's Why You Should Buy Century Communities (CCS) Stock Now
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Shares of Century Communities, Inc. (CCS - Free Report) have rallied more than 28% in the last three months, outperforming the 18.7% growth of the Zacks Homebuilding Industry. Additionally, this homebuilder outperformed the industry in each of the four-week, 12-week and 52-week time frames.
Moreover, earnings estimates have risen in the last few weeks, suggesting that sentiments on Century Communities are moving in the right direction. Over the last 30 days, the Zacks Consensus Estimate for 2018 earnings increased 7.3%. This signifies bullish analysts’ sentiment. Also, this Zacks Rank #1 (Strong Buy) company’s robust fundamentals and expectations of outperformance in the near term raise hopes. You can see the complete list of today’s Zacks #1 Rank stocks here.
Again, investing in the industry might sound profitable right now, as it falls within the top 11% (29 out of 256 industries) of the Zacks Industry Rank, which hints at further growth. The housing market has been going strong lately, courtesy of steady job growth and gradual economic recovery.
What Makes Century Communities a Solid Bet
Stellar Performance & Solid Growth Prospect: The company earned record levels of revenues, deliveries and backlog in its last reported quarter. Home sales revenues increased a record 51%, deliveries grew 37% to 968 homes, backlog (in value) increased 81% to $689.3 million. Overall, the company witnessed significant improvement across nearly all operating metrics in Q3.
The company remains encouraged by the homebuilding momentum in both its legacy and new markets, which helped it in driving another quarter of meaningful year-over-year growth in net new contracts.
Century Communities has attractive upside potential banking on management's impressive execution of its growth strategy, the benefits from recent acquisitions, and broader positive homebuilding momentum in the United States.
The company’s 2018 earnings are expected to grow 72.3%, outperforming the industry’s growth of 26.9%. Century Communities’ revenues are expected to increase 29.2% in 2018 compared with the industry average growth of 10.1%.
UCP Acquisition: In August 2017, Century Communities completed the acquisition of UCP, Inc. at an aggregate transaction value of approximately $359 million, expanding the company’s reach into 10 states.
Again, in October 2017, Century Communities completed the bolt-on acquisition of the assets of Sundquist Homes, thereby further strengthening its presence and enhancing operating efficiencies in that market.
The acquisition of UCP will help the company to reach in the states of California, Washington, Nevada, Utah, Colorado, Texas, Tennessee, Georgia, North Carolina and South Carolina. The combined company will operate in 10 states, 17 markets and 111 communities, with revenues of approximately $1.5 billion and inventories of $1.3 billion (as of Jun 30, 2017). The company remains optimistic and believes that this addition solidifies its position as the 16th largest public homebuilder in the United States. This transaction is expected to be accretive to 2018 earnings per share due to economies of scale, operational efficiencies and cost synergies.
Undervalued Compared to Peers: The company currently has a trailing 12-month Price-to-Earnings or P/E ratio of 13.9. This compares favorably with its industry’s trailing 12-month P/E ratio of 18.3.
Moreover, Century Communities has a forward P/E ratio (price relative to this year’s earnings) of just 9.4, lower than the industry’s P/E ratio of 12.4. So, it is fair to say that a slightly more value-oriented path may be ahead for the stock in the near term too.
Other Stocks to Consider
Investors may also consider stocks like Lennar Corp. (LEN - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and KB Home (KBH - Free Report) , each sporting a Zacks Rank #2 (Buy).
For fiscal 2018, earnings for Lennar is expected to increase 34.9%.
D.R. Horton is likely to witness an increase of 27.4% in earnings for the current fiscal year.
KB Home is expected to witness 36.2% growth in earnings this year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's Why You Should Buy Century Communities (CCS) Stock Now
Shares of Century Communities, Inc. (CCS - Free Report) have rallied more than 28% in the last three months, outperforming the 18.7% growth of the Zacks Homebuilding Industry. Additionally, this homebuilder outperformed the industry in each of the four-week, 12-week and 52-week time frames.
Moreover, earnings estimates have risen in the last few weeks, suggesting that sentiments on Century Communities are moving in the right direction. Over the last 30 days, the Zacks Consensus Estimate for 2018 earnings increased 7.3%. This signifies bullish analysts’ sentiment. Also, this Zacks Rank #1 (Strong Buy) company’s robust fundamentals and expectations of outperformance in the near term raise hopes. You can see the complete list of today’s Zacks #1 Rank stocks here.
Again, investing in the industry might sound profitable right now, as it falls within the top 11% (29 out of 256 industries) of the Zacks Industry Rank, which hints at further growth. The housing market has been going strong lately, courtesy of steady job growth and gradual economic recovery.
What Makes Century Communities a Solid Bet
Stellar Performance & Solid Growth Prospect: The company earned record levels of revenues, deliveries and backlog in its last reported quarter. Home sales revenues increased a record 51%, deliveries grew 37% to 968 homes, backlog (in value) increased 81% to $689.3 million. Overall, the company witnessed significant improvement across nearly all operating metrics in Q3.
The company remains encouraged by the homebuilding momentum in both its legacy and new markets, which helped it in driving another quarter of meaningful year-over-year growth in net new contracts.
Century Communities has attractive upside potential banking on management's impressive execution of its growth strategy, the benefits from recent acquisitions, and broader positive homebuilding momentum in the United States.
The company’s 2018 earnings are expected to grow 72.3%, outperforming the industry’s growth of 26.9%. Century Communities’ revenues are expected to increase 29.2% in 2018 compared with the industry average growth of 10.1%.
UCP Acquisition: In August 2017, Century Communities completed the acquisition of UCP, Inc. at an aggregate transaction value of approximately $359 million, expanding the company’s reach into 10 states.
Again, in October 2017, Century Communities completed the bolt-on acquisition of the assets of Sundquist Homes, thereby further strengthening its presence and enhancing operating efficiencies in that market.
The acquisition of UCP will help the company to reach in the states of California, Washington, Nevada, Utah, Colorado, Texas, Tennessee, Georgia, North Carolina and South Carolina. The combined company will operate in 10 states, 17 markets and 111 communities, with revenues of approximately $1.5 billion and inventories of $1.3 billion (as of Jun 30, 2017). The company remains optimistic and believes that this addition solidifies its position as the 16th largest public homebuilder in the United States. This transaction is expected to be accretive to 2018 earnings per share due to economies of scale, operational efficiencies and cost synergies.
Undervalued Compared to Peers: The company currently has a trailing 12-month Price-to-Earnings or P/E ratio of 13.9. This compares favorably with its industry’s trailing 12-month P/E ratio of 18.3.
Moreover, Century Communities has a forward P/E ratio (price relative to this year’s earnings) of just 9.4, lower than the industry’s P/E ratio of 12.4. So, it is fair to say that a slightly more value-oriented path may be ahead for the stock in the near term too.
Other Stocks to Consider
Investors may also consider stocks like Lennar Corp. (LEN - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and KB Home (KBH - Free Report) , each sporting a Zacks Rank #2 (Buy).
For fiscal 2018, earnings for Lennar is expected to increase 34.9%.
D.R. Horton is likely to witness an increase of 27.4% in earnings for the current fiscal year.
KB Home is expected to witness 36.2% growth in earnings this year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>