CCS
Century Communities, Inc.
$51.95
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 62.1% below fair value
You pay
$51.95
Bear
$100.42
Fair
$136.93
Bull
$173.45
Bear
$100.42
+93.3%
$10.40 × 14x + net cash
Fair
$136.93
+163.6%
$10.40 × 18x + net cash
Bull
$173.45
+233.9%
$10.40 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($10.40)
Implied Market Multiple
5.0x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $60.67 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $136.93 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Price-to-book value of 0.6x is below the typical low point. This could be a bargain, but check whether asset write-downs are coming.
Wall Street's average price target is $60.67 (from 11 analysts). Our estimate is 157% above the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing