Champion Homes (SKY) AI Stock Analysis

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Champion Homes

(NYSE:SKY)

Rating:63Neutral

Price Target:―

Skyline Champion's overall score reflects strong financial performance with robust profitability and a low-leverage balance sheet. However, technical indicators show bearish momentum, contributing to a lower score. The valuation appears stretched, which may deter value investors. Positive sentiment from the recent earnings call and the strategic addition to the board are favorable but are offset by market challenges and technical weakness.

Champion Homes (SKY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.76B

Dividend YieldN/A

Average Volume (3M)691.11K

Price to Earnings (P/E)19.1

Beta (1Y)1.08

Revenue Growth22.52%

EPS Growth-18.73%

CountryUS

Employees9,000

SectorConsumer Cyclical

Sector Strength70

IndustryResidential Construction

Share Statistics

EPS (TTM)0.65

Shares Outstanding57,282,560

10 Day Avg. Volume1,332,640

30 Day Avg. Volume691,108

Financial Highlights & Ratios

PEG Ratio3.21

Price to Book (P/B)3.37

Price to Sales (P/S)0.00

P/FCF Ratio34.46

Enterprise Value/Market Cap1.24

Enterprise Value/Revenue0.53

Enterprise Value/Gross Profit7.18

Enterprise Value/Ebitda5.03

Forecast

1Y Price Target

$79.67

Price Target Upside21.86% Upside

Rating ConsensusHold

Number of Analyst Covering4

Champion Homes Business Overview & Revenue Model

Company DescriptionSkyline Champion Corporation produces and sells factory-built housing in North America. The company offers manufactured and modular homes, park models RVs, accessory dwelling units, and modular buildings for the multi-family and hospitality sectors. It builds homes under the Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, and Titan Homes brands in the United States; and Moduline and SRI Homes brand names in western Canada. The company also provides construction services to install and set-up factory-built homes; operates Titan Factory Direct, a factory-direct manufactured home retail business with 18 sales centers in the southern United States; and engages in the transportation of manufactured homes and recreational vehicles. The company was founded in 2010 and is headquartered in Troy, Michigan.

How the Company Makes MoneyChampion Homes makes money primarily through the sale of its modular and manufactured homes. The company's revenue model revolves around the production and sale of these homes to individual consumers, developers, and retailers. Key revenue streams include the direct sale of homes to end-users, partnerships with real estate developers for larger projects, and contracts with retailers who distribute their products. Additionally, the company benefits from economies of scale in manufacturing, allowing it to maintain competitive pricing while securing profits. Strategic partnerships with suppliers for materials and with financial institutions for consumer financing options also contribute to its earnings.

Champion Homes Earnings Call Summary

Earnings Call Date:May 27, 2025

(Q4-2025)

% Change Since: -22.41%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

Champion Homes reported significant growth in sales and revenue, successful acquisitions, and a strong financial position. However, the company faces challenges from market uncertainty, seasonality impacts, operational adjustments, and pressure on gross margins.

Q4-2025 Updates

Positive Updates

Record Sales and Revenue Growth

Champion Homes reported sales of over 26,000 homes in fiscal 2025, a 19% increase in homes sold year-over-year. Revenue grew by 23% to $2.5 billion.

International Builder Show Success

Champion Homes had a tremendous reception to new products at the International Builder Show, showcasing models focused on providing affordable turnkey homes.

Acquisition of Iseman Homes

Champion Homes announced the acquisition of Iseman Homes, expanding its retail presence in the Plains region of the U.S. The acquisition includes 10 retail sales centers and is expected to close by the end of the first fiscal quarter.

Strong Financial Position

Champion Homes reported $610 million in cash and cash equivalents, with long-term borrowings of $25 million. The company also refreshed a $100 million share repurchase authority.

Engagement with HUD

Positive dialogue with the Department of Housing and Urban Development, with a focus on making homeownership more attainable.

Negative Updates

Market and Consumer Uncertainty

Champion Homes faces an unpredictable environment with tariffs and inflation. Demand has been less predictable compared to a normal spring selling season.

Impact of Weather and Seasonality

Fourth-quarter revenue decreased sequentially by 8% due to expected seasonality and weather impacts in the South, including Texas.

Operational Adjustments

Champion Homes idled a production location in Florida and consolidated two Canadian factories, reflecting slow recovery in Florida post-hurricanes and a need for improved efficiencies.

Pressure on Gross Margin

Near-term gross margins are expected to be in the 25% to 26% range due to consumer confidence, decreased demand in certain markets, and inflation.

Company Guidance

During the Champion Homes Fourth Quarter Fiscal 2025 Earnings Call, the company reported a 19% year-over-year increase in homes sold, translating to a 23% revenue growth, achieving sales of $2.5 billion for fiscal year 2025. The fourth quarter alone saw net sales rise 11% to $594 million, with a 6% increase in homes sold, totaling 6,171 units. The backlog at the end of the year was $343 million, up 9% from the previous year, with an average lead time of eight weeks. Despite normal seasonality and market uncertainties, the company maintained a strong gross margin, which expanded by 740 basis points to 25.7%, driven by higher average selling prices and a greater share of sales through captive retail sales centers. The quarter's net income rose to $36 million or $0.63 per diluted share, compared to $3 million or $0.05 per diluted share in the prior year. Additionally, Champion Homes announced the acquisition of Iseman Homes, which is expected to contribute approximately $40 million in annualized revenues. As they enter fiscal 2026, the company anticipates Q1 revenue to increase by low single digits year-over-year, while navigating a dynamic market environment with strategic investments and operational adjustments.

Champion Homes Financial Statement Overview

Summary

Skyline Champion presents a robust financial profile with strong profitability, a low-leverage balance sheet, and healthy cash generation. While growth in revenues has seen fluctuations, the company maintains high operational efficiency and good shareholder returns. Continued focus on cash flow management and monitoring revenue trends will be critical for sustaining its financial health.

Income Statement

Very Positive

Skyline Champion has shown strong revenue growth over the years, with a noticeable improvement in gross profit and net profit margins. The TTM data highlights a robust gross profit margin of 27.39% and a net profit margin of 9.23%. However, recent revenue decline from the peak in 2023 needs monitoring. EBITDA and EBIT margins are healthy, indicating good operational efficiency.

Balance Sheet

Very Positive

The company's balance sheet is strong, with a low debt-to-equity ratio of 0.02 in the TTM period, reflecting minimal leverage. An equity ratio of 75.05% demonstrates a solid equity base relative to total assets. The return on equity stands at 14.38%, showcasing decent profitability for shareholders. The company’s financial position is stable with significant liquidity.

Cash Flow

Positive

Skyline Champion's cash flow statement is positive, with consistent free cash flow generation. Despite a recent dip in free cash flow growth, the operating cash flow to net income ratio of 0.91 in the TTM is satisfactory. This indicates that the company is effectively converting its profits into cash. The free cash flow to net income ratio is strong, yet the declining trend should be watched.

TTM	Mar 2024	Jun 2023	Jun 2022	Jun 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
2.38B	2.02B	2.61B	2.21B	1.42B	1.37B
	Gross Profit
649.82M	485.79M	818.68M	589.12M	287.69M	278.98M
	EBIT
263.64M	175.21M	518.28M	332.90M	108.76M	86.45M
	EBITDA
271.29M	210.12M	545.01M	353.84M	126.46M	107.54M
	Net Income Common Stockholders
219.81M	146.70M	401.80M	248.04M	84.90M	58.16M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
495.06M	495.06M	747.45M	435.41M	262.58M	209.46M
	Total Assets
1.92B	1.92B	1.56B	1.23B	917.90M	781.70M
	Total Debt
154.70M	154.70M	12.43M	47.89M	65.06M	111.24M
	Net Debt
-340.37M	-340.37M	-735.02M	-387.52M	-197.52M	-98.21M
	Total Liabilities
500.97M	500.97M	329.72M	409.51M	349.29M	307.38M
	Stockholders Equity
1.42B	1.42B	1.23B	825.11M	568.61M	474.31M
Cash Flow		Free Cash Flow
149.04M	169.79M	363.98M	192.50M	145.88M	61.35M
	Operating Cash Flow
198.94M	222.70M	416.23M	224.48M	153.90M	76.74M
	Investing Cash Flow
-46.27M	-485.68M	-61.18M	-31.97M	-56.81M	-14.09M
	Financing Cash Flow
-58.92M	10.86M	-37.02M	-19.94M	-47.81M	21.57M

Champion Homes Technical Analysis

Technical Analysis Sentiment

Negative

Last Price65.38

Price Trends

50DMA

83.97

Negative

100DMA

90.47

Negative

200DMA

92.50

Negative

Market Momentum

MACD

-6.41

Positive

RSI

24.73

Positive

STOCH

9.06

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKY, the sentiment is Negative. The current price of 65.38 is below the 20-day moving average (MA) of 80.12, below the 50-day MA of 83.97, and below the 200-day MA of 92.50, indicating a bearish trend. The MACD of -6.41 indicates Positive momentum. The RSI at 24.73 is Positive, neither overbought nor oversold. The STOCH value of 9.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SKY.

Champion Homes Risk Analysis

Champion Homes disclosed 35 risk factors in its most recent earnings report. Champion Homes 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

Champion Homes Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MHO	79 Outperform	$2.91B	5.79	19.02%	―	8.68%	8.39%
CVCO	77 Outperform	$3.44B	20.55	16.30%	―	4.09%	3.14%
TMHC	75 Outperform	$5.68B	6.73	15.97%	―	12.19%	23.15%
MTH	71 Outperform	$4.62B	6.51	14.58%	2.37%	-0.68%	-7.99%
KBH	69 Neutral	$3.72B	6.32	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

SKY

Champion Homes

65.38

-1.35

-2.02%

CVCO

Cavco Industries

423.85

79.84

23.21%

KBH

KB Home

52.95

-14.20

-21.15%

MHO

M/I Homes

109.46

-12.45

-10.21%

MTH

Meritage

65.24

-17.80

-21.44%

TMHC

Taylor Morrison

58.09

2.57

4.63%

Champion Homes Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Champion Homes Expands Board with New Director

Positive

Mar 13, 2025

On March 11, 2025, Champion Homes, Inc. expanded its Board of Directors by appointing Mary B. Fedewa as an independent director, increasing the board size to eight members. Ms. Fedewa, an experienced leader in the real estate industry, brings significant expertise in finance and capital markets, which is expected to support Champion Homes’ strategic growth and innovation efforts. Her appointment is seen as a move to enhance the company’s capabilities in navigating the evolving housing market, aiming to deliver sustained value for shareholders.

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.