CCS · Century Communities
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $61.24
Note written ·
Price against the kill line
16.1% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $61.24, on record since 11 November 2026. The shares are down 26.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $61.24, the level of the 200-day average of closes on 11 November 2026, which would show the shares leading the S&P 500. Fourth-quarter orders above the 2,284 of the third quarter with adjusted margin above 19.3% would point the same way.
Research onlyNot in the portfolio.
Key figures from the filings · Consumer Discretionary
Quarter to 30 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 865
- Revenue, change on a year (%)
- −11.8
- Net cash, cash less debt ($M)
- −1,727
- Price to earnings (×)
- 13.3
- Enterprise value to sales (×)
- 0.8
All filed numbers
What Century Communities reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) |
|---|---|---|
| first filed | 865 | −11.8 |
| first filed | 927 | −7.3 |
| first filed | 790 | −12.6 |
| first filed | 1,234 | −3.1 |
| first filed | 980 | −13.8 |
| first filed | 1,001 | −3.7 |
| Pre-tax income ($M) | 15.8 |
| Net income ($M) four quarters: 109 | 12.6 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −5.1 |
| Operating cash flow ($M) | −56.7 |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 86.1 |
| Debt ($M) | 1,813 |
| Net cash, cash less debt ($M) | −1,727 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | Not reported |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 2,561 |
| Market value ($M) | 1,452 |
| Enterprise value, market value plus net debt ($M) | 3,178 |
| Enterprise value to sales (×) | 0.8 |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 13.3 |
| Price to book value (×) | 0.6 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 6.7% of shares outstanding sold short, 8.4 days of average trading to cover, 0.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $7.3M |
The thesis
Century Communities' orders fell 4.3% in the third quarter and the company cut its 2026 delivery range, so the shares are more likely to lag the S&P 500 until orders and margin stop weakening. The fourth-quarter report, expected around late January 2027, settles it.
The company reported on 28 October 2026 that net new home contracts were 2,284, down from 2,386 a year earlier. It lowered the 2026 delivery range to 9,350–9,650 homes from 9,750–10,500 on 22 July 2026. The second-quarter order gain of 3% did not carry into the third quarter.
The price already reflects that miss. The shares closed at $53.06 on 11 November 2026, 30.2% below the 52-week high of $76.00 (intraday, 13 February 2026) and 25.7% lower over three months, just above B. Riley Securities' $52 target.
Bullish and bearish views on Century Communities, Inc.
The bull case on Century Communities, Inc. (CCS), in brief: book value per share is a record. The bear case: orders fell year over year.
Bull case
- Book value per share is a record. Century reported $90.61 at 30 September 2026 and stockholders' equity of $2.6 billion. The shares closed at $53.06 on 11 November 2026.
- Adjusted margin held near 19–20%. Adjusted homebuilding gross margin was 19.3% in the third quarter against 20.1% a year earlier. GAAP margin fell to 15.0% from 17.9%, with $19.6 million of inventory impairments in the quarter.
- The footprint is growing. Community count reached 343 at 30 September 2026, up 6.9% from 321 a year earlier. The HistoryMaker Homes acquisition closed on 7 October 2026 and adds about 100 deliveries to the 2026 range.
- Liquidity and the dividend are intact. Total liquidity was $863.8 million at 30 September 2026, and the revolver was increased to $1.2 billion maturing November 2030. The board declared the quarterly dividend of $0.32 per share on 5 November 2026.
Bear case
- Orders fell year over year. Third-quarter contracts of 2,284 were down 4.3% from 2,386, and nine-month contracts of 7,278 were down 4.5%. Backlog was 1,106 homes worth $414.0 million at 30 September 2026.
- Guidance was cut. The 2026 delivery range is 9,350–9,650 homes, including about 100 from HistoryMaker, with home sales revenues of $3.3–3.4 billion. Total third-quarter revenues were $864.5 million against $980.3 million a year earlier.
- Earnings missed estimates. Adjusted diluted earnings per share were $1.01 against $1.52 a year earlier and a $1.20 estimate, and revenue missed the $949.850 million estimate, according to a 28 October 2026 consensus comparison in company news. Diluted EPS was $0.44 against $1.25.
- Leverage is rising. Net homebuilding debt to net capital was 34.9% at 30 September 2026 against 25.9% at 31 December 2025. S&P Global Ratings cut the issuer rating to BB- from BB on 7 September 2026 with a negative outlook.
- The shares have weakened again. They closed at $56.94 on 9 November 2026 and $53.06 on 11 November 2026, and the 50-day average of closes of $58.26 is above the last close.
Price setup
The shares closed at $53.06 on 11 November 2026. The quoted 52-week high is $76.00 (intraday, 13 February 2026), and the 52-week closing low is $48.41 on 15 May 2026.
The 50-day average of closes is $58.26. The 200-day average of closes is higher than the 50-day average, so both slope down from the recent price range. The close of $57.04 on 5 November 2026 and the close of $56.94 on 9 November 2026 mark the recent overhead range.
Company news on 9 November 2026 and an 8-K of the same date announced that Jim Francescon will become president on 1 January 2027, succeeding Rob Francescon. Century repurchased 169,903 shares for $11.6 million in the third quarter, according to its release. No SEC Form 4 insider filings appear in the latest filing list.
Catalysts ahead
- ~24 November 2026 (est.): U.S. Census Bureau October new residential sales release. Shows whether national new-home demand is holding after the weaker order trend Century reported for the third quarter.
- ~9 December 2026 (est.): Federal Reserve policy meeting decision. Mortgage rates drive entry-level demand, and Century's third-quarter release tied weaker orders to higher rates and incentives near 1,300 basis points.
- ~28 January 2027 (est.): Century Communities fourth-quarter and full-year 2026 results. Tests orders against the 2,284 third-quarter figure, adjusted margin against 19.3%, and deliveries against the lowered 9,350–9,650 range.
What would change the view
A daily close above $61.24, the level of the 200-day average of closes on 11 November 2026, which would show the shares leading the S&P 500. Fourth-quarter orders above the 2,284 of the third quarter with adjusted margin above 19.3% would point the same way.
What it trades with
Century trades with U.S. homebuilders and with mortgage-rate moves, which shape entry-level affordability and the size of buyer incentives. The Census Bureau's new-home sales releases, including the 684,000 annualised August rate reported on 24 September 2026, are the national reference for demand. Century reports orders only quarterly, so its own order trend arrives with the fourth-quarter report.
The evidence, claim by claim (7)
- Third-quarter 2026 net new home contracts were 2,284, down 4.3% from 2,386 a year earlier; nine-month contracts were 7,278, down 4.5%. Century Communities third-quarter 2026 results (8-K exhibit 99.1) · as of
- GAAP homebuilding gross margin was 15.0% (17.9% a year earlier); adjusted homebuilding gross margin was 19.3% (20.1% a year earlier); inventory impairments were $19.6 million. Century Communities third-quarter 2026 results (8-K exhibit 99.1) · as of
- Total revenues were $864.5 million against $980.3 million a year earlier; diluted EPS was $0.44 against $1.25; adjusted diluted EPS was $1.01 against $1.52. Century Communities third-quarter 2026 results (8-K exhibit 99.1) · as of
- 2026 delivery guidance is 9,350–9,650 homes, including about 100 from HistoryMaker, with home sales revenues of $3.3–3.4 billion; the range was 9,750–10,500 homes on 22 July 2026. Century Communities third-quarter and second-quarter 2026 results releases · as of
- Net homebuilding debt to net capital was 34.9% at 30 September 2026 against 25.9% at 31 December 2025; book value per share was $90.61; total liquidity was $863.8 million. Century Communities third-quarter 2026 results (8-K exhibit 99.1) · as of
- B. Riley Securities kept a Neutral rating and lowered its price target to $52. B. Riley Securities rating note reported by company-news feeds · as of
- Century announced that Jim Francescon will become president effective 1 January 2027, succeeding Rob Francescon. Century Communities 8-K and company news · as of
Sources
- Century Communities, Inc. - Form 8-K - FY2026 · sec.gov ·
- Century Communities, Inc. - Form 8-K - FY2026 · sec.gov ·
- Century Communities reports third quarter 2026 results · finviz.com
- Century Communities Grows Community Count as Higher Rates Weigh on Q3 Demand · builderonline.com
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