On Thursday, Century Communities (NYSE: NYSE:CCS) received an updated price target from B.Riley, with the firm increasing it to $113 from the previous target of $110, while reiterating a Buy rating on the stock.
The homebuilder reported robust second-quarter financial results that surpassed estimates, with double-digit year-over-year growth in home deliveries and new orders. Additionally, the company saw a 14% increase in community count at the quarter's end.
The positive performance was attributed to Century Communities' strategic expansion into more affordable regions, including Texas and the Southeast. The company's guidance was modestly adjusted upwards as it effectively carried out share repurchase activities at values near book price and also expanded its buyback authorization.
The firm expects that the demand for new homes will continue to be strong. This outlook is supported by the successful use of rate buy-down incentives by Century Communities and other homebuilders to boost sales.
In response to these developments, B.Riley has slightly raised its revenue and earnings per share (EPS) estimates for 2024 while keeping its 2025 projections steady.
The analyst emphasized the company's advantageous position to capitalize on ongoing strong housing demand and affordability issues with its Century Complete brand.
The brand's focus on lower-cost growth markets is seen as a key factor in its potential success. Century Communities' continued performance and strategic initiatives have led to the raised price target and the maintained confidence in the stock's future prospects.
In other recent news, Century Communities reported substantial financial growth in Q2 2024, highlighted by a 17% increase in home deliveries and a 24% surge in home sales revenues.
The company also saw a 66% rise in adjusted earnings per diluted share year-over-year. These positive figures are attributed to strong demand for affordable new homes and a strategic focus on affordability.
Century Communities also reported a 20% growth in net new contracts compared to the same period last year and ended the quarter with a record community count of 266. A new stock repurchase program was approved, and Scott Dixon was promoted to CFO. The company increased its full-year 2024 delivery guidance to a range of 10,700 to 11,300 homes.
Despite these strong results, Century Communities' financial services revenues remained flat year-over-year, with profitability declining due to increased costs and lower gain on sale. However, the company remains optimistic about its margin profile moving forward. These are some of the recent developments in the company's performance and strategy.
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