One-glance verdict
Undervalued
$110.52 our estimate vs market $84.58
Wall Street consensus: $103.50 (-6.4% lower than our fair-value estimate)
23% below our estimate, below the bear case
Fundamentals snapshot
Champion Homes, Inc.
SKY · NYQ · Consumer Cyclical · Residential Construction
Current price
$84.58
52-week range
$63.69 - $99.17
Market cap
$4.59B
Balance sheet
Healthy
33.36x Strong cushion
Net cash $661.54M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 0.3% last year.
- Reward Returns 12.6% on equity, ahead of 50% of its peers.
- Risk Operating margin compressed from 19.9% to 8.5% over 3 years.
- Risk Insider ownership is only 0.8% (peer median: 10.8%).
What this company does
Champion Homes, Inc.
Champion Homes makes money by building and selling houses constructed in a factory rather than on a piece of land, serving customers in the United States and Canada. The company sells these "manufactured homes" to both individual buyers and developers of entire housing communities. This business matters because factory-built housing can be a faster and more affordable option than traditional construction, which can be very appealing to homebuyers when home prices or interest rates are high.
How the company got here
Champion Homes is the result of a 2018 merger between two long-standing names in factory-built housing, Skyline Corporation (founded in 1951) and Champion Home Builders (founded in 1953). This combination created the largest independent, publicly traded factory-built housing company in North America. The company operated as Skyline Champion Corporation until August 2024, when it was renamed Champion Homes, Inc., to better reflect its well-known brand. This move united decades of experience in building homes indoors, a method that avoids weather delays and allows for more consistent quality control.
What it actually does
Champion Homes builds houses in factories and then transports them to their final location. Think of it like building a car on an assembly line, but for houses. This process, known as factory-built or manufactured housing, allows the company to offer more affordable homes compared to traditional on-site construction. They offer a variety of structures, from single-family homes and accessory dwelling units (ADUs, which are smaller, secondary homes on the same lot as a main house) to larger buildings for apartment complexes and hotels. The company sells its homes through a network of independent dealers and its own retail stores.
U.S. Factory-built Housing
This is the company's largest business segment, responsible for the majority of its sales. It involves manufacturing a wide range of homes in factories across the United States. These homes are sold under many different brand names, including Skyline Homes, Champion Homes, and Genesis Homes. The customers for these homes are typically independent retailers, developers, and manufactured housing communities who then sell the homes to individuals and families. The company also operates its own retail centers, selling directly to homebuyers.
Canadian Factory-built Housing
Similar to its U.S. operations, this segment focuses on building homes in factories located in Western Canada. It serves the Canadian housing market with manufactured and modular homes. While a smaller part of the overall company compared to the U.S. business, it provides a significant presence in another key North American market. The homes in Canada are sold under brands like Moduline and SRI Homes.
Transportation and Installation Services
Beyond just building homes, Champion Homes also helps get them to their final destination and set them up. Through its Star Fleet Trucking brand, the company transports the factory-built homes to their sites. Additionally, its Champion Construction brand provides services to install and set up the homes, ensuring they are properly placed and assembled. This part of the business supports the main homebuilding operations by offering a more complete package to customers.
What management is betting on now
Management is focused on making homeownership more attainable for a wider range of people by providing affordable, high-quality factory-built homes. They are expanding their direct-to-consumer retail business to have a closer relationship with homebuyers. The company is also investing in providing financial services to both dealers and homebuyers, making the purchasing process smoother. A key part of their strategy is to continue to innovate home designs and improve the efficiency of their factories to meet the growing demand for affordable housing.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$45.71M
FY2025 Q3
$37.27M
FY2025 Q4
$33.44M
FY2026 Q1
$66.40M
FY2026 Q2
$66.96M
FY2026 Q3
$92.89M
FY2026 Q4
$43.50M
FY2027 Q1
$62.65M
Revenue
$710.23M
Net income
$49.16M
Diluted EPS
0.89
Operating cash flow
$72.48M
Free cash flow
$62.65M
Fetching…
Sources
Revenue
$621.28M
Net income
$29.68M
Diluted EPS
0.53
Operating cash flow
$52.70M
Free cash flow
$43.50M
Fetching…
Sources
Revenue
$656.61M
Net income
$54.34M
Diluted EPS
0.97
Operating cash flow
$99.99M
Free cash flow
$92.89M
Fetching…
Sources
Revenue
$684.43M
Net income
$58.20M
Diluted EPS
1.03
Operating cash flow
$75.88M
Free cash flow
$66.96M
Fetching…
Sources
Revenue
$701.32M
Net income
$64.69M
Diluted EPS
1.13
Operating cash flow
$75.30M
Free cash flow
$66.40M
Fetching…
Sources
Revenue
$593.87M
Net income
$36.35M
Diluted EPS
0.63
Operating cash flow
$46.01M
Free cash flow
$33.44M
Fetching…
Sources
Revenue
$644.92M
Net income
$61.54M
Diluted EPS
1.06
Operating cash flow
$50.41M
Free cash flow
$37.27M
Fetching…
Sources
Revenue
$616.88M
Net income
$54.73M
Diluted EPS
0.94
Operating cash flow
$59.83M
Free cash flow
$45.71M
Fetching…
Sources
Is it cheap or expensive?
Fair value $110.52 vs current price $84.58
Wall Street consensus is the average analyst price target: $103.50 (-6.4% lower than our fair-value estimate).
Our most-likely fair value is $110.52 a share — about 30.7% above today's price of $84.58, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $661.5M - more cash than debt. Interest coverage 33.4x.
Net debt
$-661.54M
Interest coverage
33.36x
Champion Homes, Inc.'s profit covers its interest bill about 33.4 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
SKY
BASELINE
Champion Homes, Inc.
Total debt $123.17M Interest coverage 33.36x This is the baseline the peer rows are being compared against.
Total debt $41.11M Interest coverage 422.49x +1,167% vs SKY Carries about 12.7x more debt cushion than SKY.
Total debt $1.11M Interest coverage 1,728.82x +5,083% vs SKY Carries about 51.8x more debt cushion than SKY.
Total debt $408.40M Interest coverage 33.62x +1% vs SKY Has roughly the same debt cushion as SKY.
Total debt $791.89M Interest coverage 1.61x -95% vs SKY Carries about 20.7x less debt cushion than SKY.
Total debt $0.00 Interest coverage 8.97x -73% vs SKY Carries about 3.7x less debt cushion than SKY.
What you should know
The case for and against SKY
3 Rewards
3 Risks
Rewards
-
Revenue grew 0.3% last year.
-
Returns 12.6% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 19.9% to 8.5% over 3 years.
-
Insider ownership is only 0.8% (peer median: 10.8%).
-
Stock trades 7.1% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
24.73x
Forward P/E
19.84x
P/B
2.92x
P/S
1.72x
EV/EBITDA
13.76x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
26.0%
Operating margin
8.5%
Net margin
7.2%
ROE
12.6%
ROA
6.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.08x
Current ratio
2.74x
Quick ratio
1.87x
Total debt
$123.17M
Total cash
$784.71M
Growth
How the business has been compounding
Revenue TTM
$2.67B
Revenue 5Y CAGR
4.8%
EPS TTM
3.42
EPS 5Y CAGR
-19.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$301.05M
Free CF TTM
$269.75M
FCF margin
10.1%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2018-05-24