Cavco Industries (CVCO) AI Stock Analysis

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Cavco Industries

(NASDAQ:CVCO)

77Outperform

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. S&P 500 (SPY)

Market Cap

$4.13B

Dividend YieldN/A

Average Volume (3M)62.47K

Price to Earnings (P/E)25.4

Beta (1Y)1.02

Revenue Growth4.09%

EPS Growth3.14%

CountryUS

Employees6,500

SectorConsumer Cyclical

Sector Strength58

IndustryResidential Construction

Share Statistics

EPS (TTM)6.90

Shares Outstanding8,013,148

10 Day Avg. Volume49,830

30 Day Avg. Volume62,469

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.79

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit7.67

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$547.50

Price Target Upside6.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

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 Financial Statement Overview

Summary

Cavco Industries demonstrates a strong financial standing with robust profitability and balance sheet metrics. The income statement highlights effective revenue and cost management, while the balance sheet showcases financial strength with low leverage. Despite a decline in free cash flow growth, the company maintains solid cash flow ratios, indicating a generally healthy financial trajectory with some areas for improvement in cash flow generation.

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 2024	Jun 2023	Jun 2022	Jun 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
1.79B	2.14B	1.63B	1.11B	1.06B
	Gross Profit
426.90M	554.93M	408.75M	238.98M	230.52M
	EBIT
178.98M	184.79M	202.50M	88.83M	84.91M
	EBITDA
195.86M	315.00M	212.81M	94.41M	89.19M
	Net Income Common Stockholders
157.82M	240.55M	197.70M	76.65M	75.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
370.96M	286.40M	264.24M	341.77M	256.41M
	Total Assets
1.35B	1.31B	1.15B	951.83M	810.43M
	Total Debt
35.15M	21.68M	24.78M	25.55M	25.70M
	Net Debt
-317.54M	-249.75M	-219.37M	-296.73M	-216.13M
	Total Liabilities
320.75M	330.47M	323.69M	268.19M	202.84M
	Stockholders Equity
1.03B	976.29M	830.46M	683.64M	607.59M
Cash Flow		Free Cash Flow
207.26M	211.59M	125.57M	88.49M	87.40M
	Operating Cash Flow
224.68M	255.69M	144.22M	114.03M	101.74M
	Investing Cash Flow
-31.71M	-129.34M	-159.10M	-23.35M	-25.24M
	Financing Cash Flow
-107.71M	-102.20M	-65.09M	-6.98M	-20.76M

Cavco Industries Technical Analysis

Technical Analysis Sentiment

Positive

Last Price515.82

Price Trends

50DMA

503.13

Positive

100DMA

493.03

Positive

200DMA

460.82

Positive

Market Momentum

MACD

1.31

Negative

RSI

58.57

Neutral

STOCH

90.45

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVCO, the sentiment is Positive. The current price of 515.82 is above the 20-day moving average (MA) of 482.70, above the 50-day MA of 503.13, and above the 200-day MA of 460.82, indicating a bullish trend. The MACD of 1.31 indicates Negative momentum. The RSI at 58.57 is Neutral, neither overbought nor oversold. The STOCH value of 90.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVCO	77 Outperform	$4.13B	25.40	16.33%	―	4.09%	3.14%
MTH	75 Outperform	$4.78B	6.91	14.58%	2.34%	-0.68%	-7.99%
TPH	75 Outperform	$2.78B	6.83	13.28%	―	10.82%	19.34%
MHO	73 Outperform	$2.88B	5.69	19.02%	―	8.68%	8.39%
KBH	71 Outperform	$3.80B	6.67	15.58%	1.89%	5.54%	11.12%
SKY	63 Neutral	$4.95B	30.49	11.18%	―	22.52%	-18.73%
Sector *	61 Neutral	$6.58B	11.81	3.06%	3.99%	2.54%	-21.54%

* Consumer Cyclical Sector Average

Performance Comparison

CVCO

Cavco Industries

518.38

146.87

39.53%

KBH

KB Home

53.71

-14.96

-21.79%

MHO

M/I Homes

108.94

-13.61

-11.11%

MTH

Meritage

68.11

-20.57

-23.20%

SKY

Champion Homes

87.55

8.93

11.36%

TPH

Tri Pointe

31.07

-8.40

-21.28%

Cavco Industries Earnings Call Summary

Earnings Call Date:Jan 30, 2025

(Q3-2025)

% Change Since: 8.18%|

Next Earnings Date:May 22, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive overall sentiment with significant improvements in EPS, revenue, and segment performance. The company has successfully implemented strategies to enhance profitability and market positioning, despite facing some regional market challenges and external uncertainties.

Q3-2025 Updates

Positive Updates

Strong EPS Growth

Earnings per share (EPS) increased by 30% sequentially to $6.90, driven by improved results in both financial services and factory-built housing.

Financial Services Segment Recovery

The Financial Services segment recorded its best quarterly profit in four years, with improved profitability due to changes in underwriting and premium increases.

Revenue Increase

Net revenue for the third fiscal quarter of 2025 was $522 million, up $75.2 million or 16.8% compared to $446.8 million during the prior year.

Factory-Built Housing Segment Performance

Factory-built housing segment net revenue was $500.9 million, up 17.3%, with a 21.6% increase in homes sold, despite a 3.5% decrease in average revenue per home sold.

Digital Marketing Strategy Success

Increased traffic, lead generation, and the number of independent retail businesses connecting to the digital platform validated the company's digital marketing strategy.

Gross Margin Improvement

Consolidated gross margins improved by 180 basis points to 24.9% compared to the same period last year.

Negative Updates

Decrease in Average Revenue per Home Sold

The average revenue per home sold decreased by 3.5%, primarily due to a lower proportion of homes sold through company-owned stores and product pricing decreases.

Challenges in Florida Market

The Florida market remains challenging with slower market improvements compared to other regions.

Potential Impact of New Administration Policies

Uncertainty regarding tariffs and potential immigration policies that may impact input costs and labor availability.

Company Guidance

During the third quarter of fiscal year 2025, Cavco Industries reported strong performance across its operations, with a 30% sequential increase in earnings per share (EPS) to $6.90. The Financial Services segment recorded its highest quarterly profit in four years, driven by improved insurance operations, including better underwriting practices and premium increases. Meanwhile, the Factory-built Housing segment saw a 3.4% increase in volume and a gross margin improvement of 70 basis points, despite normal seasonal slowdowns. Net revenue for the quarter was $522 million, representing a 16.8% increase from the previous year. The company also maintained a healthy backlog of six to eight weeks and increased production rates, positioning itself well for future demand. Additionally, Cavco repurchased $42 million in stock, with cumulative repurchases totaling $389 million since the program's initiation. The effective tax rate decreased to 18.6% due to tax credits for ENERGY STAR compliant home shipments, contributing to a net income of $56.5 million, up $20.5 million from the prior year.

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.