Company Overview
Cavco Industries, Inc. functions as a comprehensive manufacturer and retailer of factory-built homes, serving the residential construction sector within the consumer cyclical industry. The company operates through two distinct segments, Factory-Built Housing and Financial Services, producing a diverse range of assets including park model RVs, vacation cabins, and factory-built commercial structures such as apartments. This operational scope positions the firm as a significant player with a market capitalization of $3.67 billion and annual revenue reaching $2.20 billion. Supporting this substantial scale is a workforce of 7,000 employees, which underscores the company's established presence and operational capacity in the United States housing market. The valuation metrics indicate that the market assigns a significant premium to the company's tangible assets, while the revenue figure reflects a dominant position in the factory-built housing niche relative to peer competitors.
Financial Health
Cavco Industries reported trailing twelve-month revenue of $2.20 billion, generating net income of $184.42 million and EBITDA of $251.74 million during the same period. The substantial gap between revenue and net income reveals a cost structure where operating expenses, including cost of goods sold, taxes, and administrative costs, absorb approximately 1.6 billion dollars of every revenue dollar generated. The company demonstrated financial flexibility with free cash flow of $111.74 million, indicating the ability to fund operations and strategic initiatives without relying heavily on external financing. Profitability analysis shows a gross margin of 22.3%, an operating margin of 9.9%, and a profit margin of 8.4%, suggesting that while the company retains a healthy portion of revenue after direct production costs, significant costs remain before reaching the bottom line. Liquidity and solvency are managed conservatively, evidenced by cash holdings of $241.89 million against total debt of $41.57 million, resulting in a low debt-to-equity ratio of 3.82. Short-term liquidity is robust with a current ratio of 2.48, meaning the company holds more than twice the liquid assets required to cover immediate liabilities. Management effectiveness is highlighted by a return on equity of 17.2% and a return on assets of 10.1%, metrics that demonstrate efficient generation of profits relative to the capital employed and the asset base.
Valuation Assessment
Valuation multiples for Cavco Industries show a trailing P/E ratio of 20.45 and a forward P/E of 18.82, implying that the market expects earnings growth to accelerate in the coming year to justify the lower forward multiple. The price-to-book ratio stands at 3.36, indicating that the market values the company at more than three times its net tangible book value. Alternative valuation metrics provide further context, with a price-to-sales ratio of 1.67 and an EV/EBITDA of 13.71, suggesting the company trades at a premium relative to its sales and earnings power compared to traditional manufacturing peers. Price momentum data indicates a 52-week high of $713.01 and a low of $393.53; based on the latest market data context, the stock is trading within a range that reflects recent volatility. The beta value of 1.28 signifies that the stock exhibits 28% higher volatility than the broader market, meaning price swings will likely be more pronounced during periods of market instability. These valuation metrics collectively paint a picture of a company with strong earnings power that commands a premium, though the high beta suggests heightened sensitivity to macroeconomic shifts affecting the housing sector.
Growth & Income
Growth dynamics for the fiscal period show revenue growth of 11.3% year-over-year, contrasted sharply with earnings growth of -19.1% year-over-year. This divergence implies that while top-line sales are expanding rapidly, the company is facing significant headwinds that have compressed profitability, causing earnings to lag behind revenue growth. Regarding income distribution, the company does not pay a dividend, evidenced by a dividend yield of N/A and a payout ratio of 0.0%. Instead of distributing cash to shareholders, the company retains its earnings, likely reinvesting them into capacity expansion, debt reduction, or strategic acquisitions to fuel organic growth. The overall growth and income profile is characterized by strong revenue expansion in the factory-built home segment but is currently tempered by declining earnings, while the absence of dividends directs capital back into the business for future operational scaling.