Cavco Industries (CVCO) AI Stock Analysis

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Cavco Industries

(NASDAQ:CVCO)

Rating:77Outperform

Price Target:―

Cavco Industries presents a strong overall financial position, driven by effective revenue growth and cost management, a robust balance sheet, and positive earnings call sentiment. However, the technical analysis indicates mixed momentum, and the valuation suggests a potential overvaluation. The company's ability to maintain strong operational performance amid external challenges supports a favorable outlook.

Cavco Industries (CVCO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.42B

Dividend YieldN/A

Average Volume (3M)81.92K

Price to Earnings (P/E)20.4

Beta (1Y)1.01

Revenue Growth4.09%

EPS Growth3.14%

CountryUS

Employees6,500

SectorConsumer Cyclical

Sector Strength70

IndustryResidential Construction

Share Statistics

EPS (TTM)5.40

Shares Outstanding8,021,720

10 Day Avg. Volume114,220

30 Day Avg. Volume81,918

Financial Highlights & Ratios

PEG Ratio-1.31

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio27.48

Enterprise Value/Market Cap1.00

Enterprise Value/Revenue0.48

Enterprise Value/Gross Profit9.79

Enterprise Value/Ebitda4.41

Forecast

1Y Price Target

$550.00

Price Target Upside29.76% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Cavco Industries Business Overview & Revenue Model

Company DescriptionCavco Industries, Inc. (CVCO) is a leading designer and producer of factory-built homes, serving a wide range of housing needs in the United States. The company operates through several brands, including Cavco Homes, Fleetwood Homes, and Palm Harbor Homes, offering manufactured and modular homes that cater to various residential markets. Cavco also provides insurance and financial services to its customers, enhancing its comprehensive approach to housing solutions.

How the Company Makes MoneyCavco Industries generates revenue primarily through the manufacturing and sale of factory-built homes. The company operates a network of retail centers and partners with independent retailers to distribute its products across the United States. Key revenue streams include the direct sales of manufactured and modular homes, as well as commercial structures. Additionally, Cavco earns money through its financial services segment, which offers insurance products and financial solutions related to home ownership. Strategic partnerships with retailers and financial institutions further bolster the company's revenue model, allowing it to reach a broader customer base and provide added value through integrated housing solutions.

Cavco Industries Earnings Call Summary

Earnings Call Date:May 22, 2025

(Q4-2025)

% Change Since: -15.10%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of strong financial performance and strategic initiatives such as increased shipments, revenue growth, and a successful share buyback program. However, these were offset by challenges like production disruptions due to weather, a decline in gross margin and financial services revenue, and increased SG&A expenses. Market challenges, particularly in Florida, also posed concerns.

Q4-2025 Updates

Positive Updates

Significant Increase in Unit Shipments

Unit shipments were up almost 29% year-over-year, indicating strong demand and production capacity improvements.

Strong Financial Performance

Net revenue for the fourth fiscal quarter of 2025 was $508.4 million, up $88.2 million or 21% from the prior year, driven by a 28.5% increase in homes sold.

Successful Share Buyback Program

Cavco repurchased about $33 million of stock this quarter, and since fiscal 2021, they have bought back 15.5% of outstanding shares.

Improved Branding Strategy

Rebranding of manufacturing plants to unify under the Cavco name, enhancing digital marketing efforts and customer experience.

Effective Tax Rate Reduction

The effective income tax rate was reduced to 15.4% from 21% in the prior year, partly due to higher Energy Star tax credits.

Negative Updates

Impact of Harsh Weather

Lost 24 operating days across the system due to unexpected harsh weather in February, affecting production and installations.

Decrease in Financial Services Revenue

Financial services segment net revenue was down $1.1 million or 5.2% from the prior year due to fewer loan sales and insurance policies.

Gross Margin Decline

Consolidated gross margin as a percentage of net revenue was down 80 basis points to 22.8% from 23.6% in the prior year.

Increased SG&A Expenses

Selling, general, and administrative expenses increased to $77.5 million from $61.4 million, partly due to a $10 million write-off of intangible trade name values.

Challenges in Florida Market

Continued difficulties in the Florida market with significant price competition and reduced demand.

Company Guidance

During the Cavco Industries Fourth Quarter 2025 Earnings Call, management provided guidance on several key metrics. Net revenue for the fourth fiscal quarter was $508.4 million, representing a 21% increase from the previous year, despite a sequential decrease of $13.7 million due to a decline in average revenue per home sold. Factory-built housing net revenue was $487.9 million, up 22.4% year-over-year, driven by a 28.5% increase in homes sold. Factory utilization improved significantly, reaching 70% to 75% compared to 60% in the prior year. The financial services segment faced a revenue decline of 5.2% to $20.5 million, attributed to fewer loan sales and insurance policies. Gross margin fell by 80 basis points to 22.8%, while selling, general, and administrative expenses rose due to a $10 million write-off related to brand realignment. Despite these challenges, net income increased to $36.3 million, and adjusted net income was $43.9 million, translating to an adjusted diluted EPS of $5.40. The company also repurchased $33.2 million of stock in the quarter, maintaining strong cash generation with $375.3 million in cash and restricted cash. Cavco is prepared for potential impacts from tariffs and remains confident in its strategic investments and market positioning.

Cavco Industries Financial Statement Overview

Summary

Cavco Industries exhibits strong financial performance with robust profitability and a solid balance sheet. The income statement shows effective revenue and cost management with a net profit margin of 8.76% and revenue growth of 7.33%. The balance sheet is strong with a low debt-to-equity ratio of 0.03 and a high equity ratio of 76.31%, indicating minimal leverage and financial stability. However, the cash flow score is slightly lower due to a -32.96% decline in free cash flow growth, despite reasonable cash flow health ratios.

Income Statement

Very Positive

Cavco Industries demonstrates strong performance in the income statement metrics. The TTM Gross Profit Margin stands at 23.24%, with a Net Profit Margin of 8.76%, indicating solid profitability. Revenue growth from the previous year shows a positive trend of 7.33%. The EBIT and EBITDA margins are 9.78% and 10.85%, respectively, suggesting effective cost management and operational efficiency.

Balance Sheet

Very Positive

The company's balance sheet reflects a robust financial position. A low Debt-to-Equity Ratio of 0.03 indicates minimal leverage, while the Return on Equity is a healthy 15.95%. The Equity Ratio of 76.31% further emphasizes financial stability and a strong capital structure, minimizing financial risk.

Cash Flow

Positive

Cavco Industries exhibits a stable cash flow position with a Free Cash Flow growth rate of -32.96% over the previous period, highlighting potential challenges in generating free cash flow. However, the Operating Cash Flow to Net Income ratio of 0.94 indicates effective conversion of income into cash, and the Free Cash Flow to Net Income ratio is 0.82, suggesting reasonable cash flow health.

Mar 2025	Mar 2024	Jun 2023	Jun 2022	Jun 2021
Breakdown
Income Statement		Total Revenue
2.02B	1.79B	2.14B	1.63B	1.11B
	Gross Profit
465.59M	426.90M	554.93M	408.75M	238.98M
	EBIT
190.28M	178.98M	184.79M	202.50M	88.83M
	EBITDA
190.28M	219.35M	315.00M	212.81M	94.41M
	Net Income Common Stockholders
171.04M	157.82M	240.55M	197.70M	76.65M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	370.96M	286.40M	264.24M	341.77M
	Total Assets
0.00	1.35B	1.31B	1.15B	951.83M
	Total Debt
0.00	35.15M	21.68M	24.78M	25.55M
	Net Debt
-356.23M	-317.54M	-249.75M	-219.37M	-296.73M
	Total Liabilities
0.00	320.75M	330.47M	323.69M	268.19M
	Stockholders Equity
0.00	1.03B	976.29M	830.46M	683.64M
Cash Flow		Free Cash Flow
0.00	207.26M	211.59M	125.57M	88.49M
	Operating Cash Flow
0.00	224.68M	255.69M	144.22M	114.03M
	Investing Cash Flow
-23.95M	-31.71M	-129.34M	-159.10M	-23.35M
	Financing Cash Flow
-147.95M	-107.71M	-102.20M	-65.09M	-6.98M

Cavco Industries Technical Analysis

Technical Analysis Sentiment

Negative

Last Price423.85

Price Trends

50DMA

489.41

Negative

100DMA

498.88

Negative

200DMA

471.54

Negative

Market Momentum

MACD

-21.74

Positive

RSI

26.61

Positive

STOCH

7.25

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVCO, the sentiment is Negative. The current price of 423.85 is below the 20-day moving average (MA) of 483.49, below the 50-day MA of 489.41, and below the 200-day MA of 471.54, indicating a bearish trend. The MACD of -21.74 indicates Positive momentum. The RSI at 26.61 is Positive, neither overbought nor oversold. The STOCH value of 7.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CVCO.

Cavco Industries Risk Analysis

Cavco Industries disclosed 37 risk factors in its most recent earnings report. Cavco Industries reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Cavco Industries Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPH	77 Outperform	$2.76B	6.77	13.28%	―	10.82%	19.34%
CVCO	77 Outperform	$3.42B	20.42	16.30%	―	4.09%	3.14%
MHO	74 Outperform	$2.91B	5.79	19.02%	―	8.68%	8.39%
MTH	71 Outperform	$4.69B	6.61	14.58%	2.38%	-0.68%	-7.99%
KBH	69 Neutral	$3.80B	6.46	15.58%	1.88%	5.54%	11.12%
SKY	63 Neutral	$3.76B	19.14	13.38%	―	22.52%	-18.73%
Sector *	62 Neutral	$6.94B	11.29	2.95%	3.87%	2.70%	-24.49%

* Consumer Cyclical Sector Average

Performance Comparison

CVCO

Cavco Industries

428.63

80.61

23.16%

KBH

KB Home

51.62

-16.68

-24.42%

MHO

M/I Homes

107.05

-17.05

-13.74%

MTH

Meritage

64.00

-18.78

-22.69%

SKY

Champion Homes

64.37

-2.60

-3.88%

TPH

Tri Pointe

30.02

-7.45

-19.88%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.