Century Communities, Inc. (CCS) reported third quarter earnings on the evening of November 5th at the tail-end of a particularly challenging time for the stock. Going into earnings, CCS was down 35% from its 52-week and all-time closing high set in early September. CCS is still up 7.5% for the year, but the recent earnings report did nothing to suggest that the stock can regain recent highs anytime soon.

Century Communities, Inc. (CCS) has likely peaked for the near-term

Source: FreeStockCharts.com

I read through the earnings report and listened to the conference call (just 26 minutes long). For the prepared remarks, management spent 15 minutes mainly reading from the press release. Management spent the remaining 11 minutes answering questions from four analysts.

Headline results were strong but tightened guidance meant a reduction in potential upside for this year. From the press release…

“Based on the Company’s current market outlook for the full year 2015 it now expects home deliveries to be in the range of 2,350 to 2,500 homes and home sales revenues to be in the range of $700 million to $750 million, excluding the potential impact of any future acquisitions. At the end of the full year 2015, the Company anticipates that the active selling community count will range from 90 to 95 communities.”

CCS raised guidance during the second quarter earnings announcement:

“Given our positive results in the first half of 2015, we are increasing our full year 2015 guidance. Based on our current market outlook, for the full year 2015 we expect our home deliveries to be in the range of 2,200 to 2,600 homes and our home sales revenues to be in the range of $700 million to $800 million, excluding the impact of any future acquisitions. At the end of the full year 2015, we continue to expect our active selling community count to be in the range of 80-90 communities.”

So, CCS turned out to be over-optimistic and premature in pushing the potential upside higher. In turn, this tightened guidance looks like a disappointment even with the raised floor. Despite this, I continue to hold CCS given its extremely attractive valuation, especially relative to the longer-term potential of the company: 11.6 trailing P/E, 6.8 forward P/E, 0.6 price-to-sales, and 1.0 price-to-book (data from Yahoo Finance).