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Champion Homes (SKY)
NYSE:SKY
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Champion Homes
(NYSE:SKY)
75Outperform
Champion Homes (SKY) vs. S&P 500 (SPY)
Market Cap
$5.40B
Dividend YieldN/A
Average Volume (3M)579.60K
Price to Earnings (P/E)33.2
Beta (1Y)1.49
Revenue Growth22.52%
EPS Growth-18.73%
CountryUS
Employees8,600
SectorConsumer Cyclical
Sector Strength50
IndustryResidential Construction
Share Statistics
EPS (TTM)2.83
Shares Outstanding57,275,955
10 Day Avg. Volume514,016
30 Day Avg. Volume579,604
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.22
Price to Cash Flow (P/CF)26.80
P/FCF Ratio25.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$100.00Price Target Upside6.32% Upside
Rating ConsensusHold
Number of Analyst Covering5
Champion Homes Business Overview & Revenue Model
Company DescriptionChampion Homes (SKY) is a leading manufacturer of modular and manufactured homes, offering high-quality, affordable housing solutions across the United States. The company operates in the housing and construction sectors, specializing in the design and production of factory-built homes. Champion Homes is known for its innovative construction techniques and a diverse range of customizable home designs, catering to various customer needs and preferences.
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 Financial Statement Overview
Summary
Skyline Champion exhibits strong financial performance with robust profitability, a low-leverage balance sheet, and healthy cash flow generation. Despite fluctuations in revenue growth, the company's operational efficiency and shareholder returns remain strong.Income Statement
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.85
Very Positive
Balance Sheet
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.88
Very Positive
Cash Flow
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.78
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Mar 2020 |
|---|---|---|---|---|---|
| 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 |
| 271.26M | 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 | ||||
| 581.75M | 495.06M | 747.45M | 435.41M | 262.58M | 209.46M | Total Assets |
| 2.04B | 1.92B | 1.56B | 1.23B | 917.90M | 781.70M | Total Debt |
| 24.70M | 154.70M | 12.43M | 47.89M | 65.06M | 111.24M | Net Debt |
| -557.06M | -340.37M | -735.02M | -387.52M | -197.52M | -98.21M | Total Liabilities |
| 509.17M | 500.97M | 329.72M | 409.51M | 349.29M | 307.38M | Stockholders Equity |
| 1.53B | 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
Negative
94.06
Price Trends
95.66
Negative
96.71
Negative
88.98
Positive
Market Momentum
-0.45
Positive
38.99
Neutral
17.41
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 94.06 is below the 20-day moving average (MA) of 101.57, below the 50-day MA of 95.66, and above the 200-day MA of 88.98, indicating a neutral trend. The MACD of -0.45 indicates Positive momentum. The RSI at 38.99 is Neutral, neither overbought nor oversold. The STOCH value of 17.41 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $5.40B | 33.19 | 11.18% | ― | 22.52% | -18.73% | |
74 Outperform | $2.87B | 20.74 | 12.73% | 1.80% | 7.14% | -4.01% | |
73 Outperform | $5.34B | 6.95 | 16.12% | 2.01% | 4.18% | 7.50% | |
73 Outperform | $6.15B | 7.18 | 15.80% | ― | 10.11% | 19.06% | |
72 Outperform | $2.33B | 17.15 | 10.42% | 4.70% | -1.15% | 121.43% | |
66 Neutral | $22.01B | 14.50 | 39.23% | ― | 10.81% | 10.16% | |
59 Neutral | $12.41B | 10.34 | 1.32% | 3.61% | 1.65% | -18.04% |
* Consumer Cyclical Sector Average
Performance Comparison
SKY
Champion Homes
94.06
8.59
10.05%
LCII
LCI Industries
91.18
-16.44
-15.28%
MTH
Meritage
72.16
-7.08
-8.93%
NVR
NVR
7,350.48
-395.82
-5.11%
PATK
Patrick Industries
85.34
12.66
17.42%
TMHC
Taylor Morrison
59.48
0.33
0.56%
Champion Homes Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 1.41% | Next Earnings Date: May 27, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment overall, with significant growth in net sales, homes sold, and improved financial metrics. However, some challenges were noted with order rate declines and increased SG&A expenses, as well as a decline in the Canadian market.Highlights
Record Net Sales Growth
Year-over-year net sales increased 15.3% to $645 million in Q3.
Increase in Homes Sold
Homes sold during the period increased by 13%, totaling 6,646 homes.
Strong Backlog Position
Backlog at the end of Q3 was $313 million, up 8% from the same period last year.
Successful Regional Homes Acquisition
The acquisition contributed to organic growth and was described as a testament to the combined organizations' customer-centric approach.
Improved Gross Margin
Consolidated gross profit increased 28% to $181 million, with gross margin expanding 280 basis points from the prior-year period.
Strong Cash Position
Champion Homes had $582 million in cash and cash equivalents with a long-term borrowing of $25 million, reflecting strong financial health.
Shareholder Returns
Returned $20 million in share repurchase and approved the replenishment of a $100 million share repurchase authority.
Lowlights
Order Rate Decline
27% sequential decline in backlog due to seasonal slowdown in order rates.
Decline in Canadian Revenue
Canadian revenue was $26 million, with the number of homes sold declining by 16% due to higher interest rates and economic uncertainty.
SG&A Cost Increase
SG&A costs increased by $23 million due to higher variable costs and investments in technology and personnel.
Company Guidance
During the third quarter of fiscal 2025, Champion Homes experienced strong financial performance, with net sales increasing by 15.3% year-over-year to $645 million and homes sold rising by 13% to 6,646 units. The company reported a backlog of $313 million, up 8% from the previous year, despite a normal seasonal slowdown contributing to a 27% sequential decline in backlog. Champion Homes anticipates fourth-quarter revenue growth in the low double digits compared to the same period last year, aligning with pre-earnings fourth-quarter consensus. The company achieved a consolidated gross profit increase of 28% to $181 million, with gross margins expanding by 280 basis points to 28.1%. Adjusted EBITDA for the quarter was $83 million, reflecting a 12.9% margin, and net income attributable to Champion Homes rose by 31% to $62 million, or $1.06 per diluted share. Champion Homes remains focused on expanding its retail and direct-to-consumer capabilities while navigating a dynamic tariff environment and continues its commitment to affordable housing across U.S. and Canadian markets.Champion Homes Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Skyline Champion Announces New Leadership with Tim Larson
Positive
Dec 13, 2024
Champion Homes has appointed Tim Larson as President and CEO, succeeding Mark Yost, as part of their leadership succession plan. Larson, who joined the company in 2021 as Chief Growth Officer, is recognized for his leadership in driving customer-centric growth and digital strategies. This transition is expected to support Champion Homes’ growth phase, leveraging Larson’s expertise to further expand their housing solutions and unlock shareholder value.
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.