Citizens has maintained its Market Outperform rating on Century Communities (NYSE: CCS) and left its price target at $92.00, a level that represents roughly 44% upside from the stock's prevailing price of $63.99. The firm kept its outlook despite the homebuilder reporting fourth-quarter gross margins that came in below expectations.
For the fourth quarter of 2025, Century reported GAAP earnings per share of $1.21, missing Citizens' estimate of $1.31 and the FactSet consensus of $1.30. Citizens attributed the earnings shortfall to the company's intentional focus on preserving sales velocity rather than maximizing price per home, an approach that weighed on quarterly margins.
Revenue for the quarter was reported at $1.2 billion, outpacing Citizens' projection of $1.0 billion. Century completed 3,000 home closings during the quarter, above Citizens' forecast of 2,700 units and consistent with a sales absorption pace of 3.3 closings per month - higher than the 2.7 closings per month Citizens expected and matching the company's pace from the same quarter a year earlier.
The pace-over-price strategy produced a GAAP gross margin of 15.4% for Q4, a result 120 basis points below Citizens' estimate and 520 basis points lower than the year-ago quarter. Citizens noted that the approach helped management exit several underperforming communities. On a trailing 12-month basis, Century's gross profit margin is reported at 19.36%, according to InvestingPro data cited in published accounts.
InvestingPro information in the published material also indicates analysts expect Century's net income to decline this year, with FY2025 EPS forecast at $5.25 compared with $6.93 diluted EPS over the last twelve months. The company has continued an aggressive share buyback program even as those forecasts anticipate lower sales in the current year.
Century's liquidity position remains robust. The company reported a current ratio of 4.92, signaling that its short-term assets substantially exceed short-term obligations. Citizens highlighted the company's sales absorption and liquidity as positive operational metrics despite margin compression.
Notably, the published account includes an additional set of fourth-quarter figures presented as "other recent news." Those figures list fourth-quarter EPS at $1.59, above a projected $1.35, and revenue at $1.23 billion, above a forecasted $1.06 billion. Those reported results indicate outperformance relative to the cited projections; however, they differ from the previously noted GAAP EPS of $1.21 and revenue of $1.2 billion. The presence of both sets of numbers in public reporting creates a mixed record for the quarter based on the material provided.
Shares of Century Communities were described as trading below the Citizens price target and above InvestingPro's Fair Value assessment, which characterized the stock as currently fairly valued. Citizens' maintained Market Outperform rating and the $92.00 target remain materially higher than the trading price referenced in the published material.
Context and implications - The quarter illustrates a trade-off Century elected to make between volume and margin. Management's decision to emphasize closings helped lift revenue and unit closings versus Citizens' expectations, while compressing GAAP gross margin compared with both Citizens' forecast and the year-ago quarter. The company also continued share repurchases amid forecasts for lower net income this year, a juxtaposition highlighted in the published analysis.
Data limitations - The published report includes conflicting numeric accounts for the fourth quarter - one showing a GAAP EPS of $1.21 and revenue of $1.2 billion, and another showing EPS of $1.59 and revenue of $1.23 billion. The available material does not resolve that divergence; readers should note the inconsistency in the disclosed figures.