Century munities(US:CCS) ZACKSยท2024-09-19 11:06Core Insights - Builder confidence in the U.S. housing market has increased, with the Housing Market Index (HMI) rising to 41 in September from 39 in August, breaking a four-month streak of low sentiment [2][4] - Decreasing mortgage rates, now at 6.2%, have contributed significantly to the improved builder confidence, marking the lowest level since February 2023 [4] - Despite the positive sentiment, a score below 50 on the HMI indicates ongoing challenges in the industry [6] Industry Overview - Rising building costs and increased competition from higher housing inventory are significant challenges for the homebuilding sector, impacting affordability [7][8] - The HMI survey indicates a reduction in price cuts among builders, with average price reductions falling below 6% for the first time since July 2022 [8] - The Zacks Building Products - Home Builders industry has outperformed broader indices, gaining 28.5% year-to-date compared to the S&P 500's growth of 18.1% [11] Company Highlights - Dream Finders Homes, Inc. (DFH): Expected EPS growth of 15.4% year-over-year, with revenue estimates indicating a 13.3% increase. The forward PE ratio is 11.11X, below the industry average [12][13] - Century Communities, Inc. (CCS): Strong Buy rating with expected EPS growth of 32.5% and revenue growth of 18.1% year-over-year. The forward PE ratio is 8.81X, below the industry average [14][15] - Taylor Morrison Home Corp. (TMHC): Buy rating with expected EPS growth of 6.2% and revenue growth of 7.1% year-over-year. The forward PE ratio is 8.13X, below the industry average [16][17] - Meritage Homes Corp. (MTH): Expected EPS growth of 5.8% and revenue growth of 2.8% year-over-year. The forward PE ratio is 9.41X, below the industry average [18][19] - Tri Pointe Homes, Inc. (TPH): Expected EPS growth of 35.7% year-over-year, with revenue estimates indicating an 18.3% increase. The forward PE ratio is 9.12X, below the industry average [20][21]