Company Overview
Champion Homes, Inc. operates as a manufacturer and seller of factory-built housing solutions within the United States and Canada, offering a diverse portfolio that includes manufactured and modular homes, park model recreational vehicles, cabins, accessory dwelling units, and commercial structures for both single and multi-family markets. The company functions within the Consumer Cyclical sector and specifically the Residential Construction industry, positioning it as an entity whose performance is closely tied to broader economic cycles and housing demand trends. Champion Homes, Inc. carries a market capitalization of $4.13 billion and generates annual revenue of $2.64 billion, supported by a workforce of 9,000 employees. These valuation and revenue figures indicate that the company maintains a significant scale within its industry, reflecting a substantial operational footprint and established market presence.
Financial Health
Champion Homes, Inc. reported a trailing twelve-month revenue of $2.64 billion with a corresponding net income of $213.57 million and an EBITDA of $308.46 million, revealing a cost structure where operating expenses and taxes consume approximately 33.6% of total revenue. The company generated free cash flow of $179.74 million, which demonstrates a robust ability to convert earnings into actual cash available for reinvestment or debt servicing. The gross margin stands at 26.6%, indicating the production efficiency and pricing power relative to the cost of goods sold. Operating margins are recorded at 9.5%, reflecting the effectiveness of the company's management in controlling overhead and administrative costs before interest and taxes. The profit margin of 8.1% illustrates the final net earnings available to shareholders after all expenses, taxes, and interest have been deducted from revenue. On the balance sheet, the company holds $659.76 million in cash against $119.11 million in debt, resulting in a debt-to-equity ratio of 7.48, which suggests a capital structure that is heavily leveraged relative to shareholder equity. The current ratio is 2.71, indicating a strong position in short-term liquidity where current assets significantly exceed current liabilities. Return on Equity is 14.1% and Return on Assets is 7.9%, metrics that reveal management's effectiveness in generating profits from the capital invested and the total asset base, respectively.
Valuation Assessment
The trailing twelve-month P/E ratio is 19.69, while the forward P/E is 19.84, suggesting that the market expects earnings to remain relatively flat or grow at a rate that aligns closely with current profitability levels. The price-to-book ratio is 2.56, indicating that the company trades at a significant premium over its book value, which may reflect investor confidence in its future growth potential or the intangible value of its brand and contracts. Alternative valuation metrics include a price-to-sales ratio of 1.56 and an EV/EBITDA of 11.49, suggesting that the market values the company based on sales revenue and earnings before interest, taxes, depreciation, and amortization at levels that are comparable to peers in the residential construction space. The stock has traded between a 52-week low of $59.44 and a 52-week high of $99.17, providing a clear range for historical price volatility. The beta value of 1.03 indicates that the stock's price volatility moves in tandem with the broader market, exhibiting slightly higher sensitivity to market fluctuations than the average stock.
Growth & Income
Revenue growth year-over-year stands at 1.8%, while earnings growth year-over-year is -8.5%, indicating that earnings are currently declining faster than revenue, which implies margin compression or increased costs that are outpacing top-line expansion. As a non-dividend payer, the company reports a dividend yield of N/A and a payout ratio of 0.0%, meaning the company reinvests its earnings into operations, debt reduction, or strategic acquisitions rather than distributing cash to shareholders. The divergence between the modest revenue growth and negative earnings growth highlights the challenges the company faces in maintaining profitability amidst a stable top-line performance. Overall, the growth and income profile presents a scenario of flat revenue expansion with temporary earnings contraction and no current cash return to shareholders via dividends.