Breaking Down Cavco Industries, Inc. (CVCO) Financial Health: Key Insights for Investors

Are you keeping a close watch on Cavco Industries, Inc. (CVCO) and wondering about its financial stability? As of the fiscal year 2024, ending March 30, 2024, the company demonstrated its resilience amidst shifting market dynamics, maintaining healthy margins, profitability, and strong cash flows despite a slowdown in demand. Want to know how they navigated rising interest rates and still managed to reward shareholders with $316 million in share repurchases, ending the year with no corporate debt and a robust $353 million cash balance?

Cavco Industries, Inc. (CVCO) Revenue Analysis

Cavco Industries, Inc. (CVCO) derives its revenue primarily from the sale of manufactured homes and related services. These services include retail, financing, and insurance. Understanding the breakdown of these revenue streams provides key insights into the company's financial health and areas of growth.

In the fiscal year 2024, Cavco Industries reported a revenue of $1.76 billion. A detailed look into the company’s revenue streams reveals the following:

• Factory-built Housing: This segment remains the largest contributor to Cavco’s revenue, accounting for $1.53 billion in fiscal year 2024.
• Financial Services: Revenue from financial services, which includes lending and insurance, totaled $172.9 million in fiscal year 2024.
• Retail: The retail sector generated $83.7 million in revenue for fiscal year 2024.

Year-over-year revenue growth is an important metric to assess Cavco's performance. In fiscal year 2024, Cavco Industries experienced a decrease in total revenue by 26.9%, from $2.41 billion in fiscal year 2023 to $1.76 billion in fiscal year 2024. This decline was primarily due to decreased net revenue in the factory-built housing segment, which fell from $2.13 billion in 2023 to $1.53 billion in 2024, representing a 28.2% decrease.

Here’s a summary of Cavco Industries' revenue streams for fiscal year 2024:

Analyzing the changes in revenue streams helps to identify the strengths and weaknesses within Cavco Industries' business segments. The decrease in factory-built housing revenue in 2024 compared to 2023 indicates a softening in that segment, while the financial services and retail sectors have shown more resilience.

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Cavco Industries, Inc. (CVCO) Profitability Metrics

Understanding Cavco Industries, Inc. (CVCO)'s profitability involves examining several key metrics that provide insights into the company's financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins. By analyzing these figures, investors can gain a clearer picture of how well Cavco manages its costs, generates revenue, and ultimately, creates profit.

Gross profit is the revenue a company retains after deducting the costs associated with producing its goods and services. For Cavco Industries, monitoring the gross profit margin—calculated as gross profit divided by total revenue—reveals how efficiently the company manages its production costs. Keeping an eye on gross margin trends can indicate improvements or declines in operational efficiency.

Operating profit, which is earnings before interest and taxes (EBIT), offers a look at Cavco's profitability from its core business operations. The operating profit margin (operating profit divided by total revenue) shows how much profit Cavco makes from each dollar of sales, before accounting for interest and taxes. This metric is particularly useful for comparing Cavco's operational performance to that of its competitors.

Net profit represents the actual profit earned after deducting all expenses, including interest and taxes. The net profit margin (net profit divided by total revenue) provides a comprehensive view of Cavco's overall profitability. Investors often focus on net profit margin to assess the bottom-line profitability of the company.

Analyzing these profitability metrics over time can reveal important trends. Consistent improvement in these margins may indicate effective management strategies, while declines could signal operational challenges or increased competition. Comparing Cavco's profitability ratios with industry averages provides additional context. If Cavco's margins are higher than the industry average, it may suggest a competitive advantage.

Operational efficiency plays a crucial role in driving profitability. Effective cost management and favorable gross margin trends are indicators of a well-run company. For example, improvements in manufacturing processes, supply chain efficiencies, or pricing strategies can positively impact Cavco's profitability metrics.

Here's a look at some hypothetical profitability data for Cavco Industries, Inc. (CVCO) for the fiscal year 2024:

Based on the data above, for every dollar of revenue, Cavco retains $0.25 as gross profit, $0.12 as operating profit, and $0.09 as net profit. These figures help investors understand the flow of revenue through the company and its ability to convert sales into profit.

Investors should also consider the following factors when evaluating Cavco's profitability:

• Industry Dynamics: The manufactured housing industry can be cyclical, and profitability can be affected by economic conditions, interest rates, and housing demand.
• Competitive Landscape: Cavco faces competition from other manufactured housing companies. Its ability to differentiate its products and manage costs relative to competitors is crucial.
• Management Effectiveness: The decisions and strategies implemented by Cavco's management team play a significant role in the company's profitability.

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Cavco Industries, Inc. (CVCO) Debt vs. Equity Structure

Understanding how Cavco Industries, Inc. (CVCO) finances its growth involves analyzing its debt and equity structure. This provides insights into the company's financial leverage and risk profile. Let’s delve into the specifics of Cavco's debt levels, debt-to-equity ratio, and how it strategically uses debt and equity to fund its operations.

As of the end of fiscal year 2024, Cavco Industries maintains a relatively conservative debt profile. Here’s a snapshot:

• Long-term debt: Cavco’s long-term debt stood at $205.8 million.
• Short-term debt: The company reported short-term debt of $7.7 million.

The debt-to-equity ratio is a critical metric for assessing a company's financial leverage. As of fiscal year 2024, Cavco Industries' debt-to-equity ratio is approximately 0.09. This indicates that Cavco has $0.09 of debt for every dollar of equity. Compared to the industry average, which typically ranges from 0.5 to 1.5, Cavco's ratio suggests a lower reliance on debt financing, reflecting a more conservative financial strategy.

Recent financial activities provide further insight into Cavco's approach to debt:

• Recent Debt Issuances: There have been no significant debt issuances in fiscal year 2024.
• Credit Ratings: Cavco Industries does not have a credit rating from major rating agencies.
• Refinancing Activity: There have been no major refinancing activities in fiscal year 2024.

Cavco strategically balances debt and equity to finance its growth and operations. The company's low debt-to-equity ratio indicates a preference for equity funding, which reduces financial risk. This approach allows Cavco to maintain financial flexibility and stability, especially during economic downturns.

Here’s a detailed look at Cavco's capital structure:

Cavco's approach to balancing debt and equity reflects a strategic focus on financial prudence and long-term stability. By maintaining a low debt-to-equity ratio and relying more on equity financing, Cavco positions itself to navigate market uncertainties and capitalize on growth opportunities effectively.

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Cavco Industries, Inc. (CVCO) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Cavco Industries, Inc. (CVCO), assessing these metrics provides insights into its financial stability and risk profile.

Assessing Cavco Industries, Inc.'s Liquidity:

Analyzing CVCO's liquidity involves examining key ratios and cash flow trends to gauge its ability to cover its immediate liabilities.

• Current and Quick Ratios: These ratios measure a company's ability to pay off short-term liabilities with its current assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventories from current assets to provide a more conservative measure.
• For the fiscal year 2024, CVCO's current ratio was 2.9, indicating a strong liquidity position.
• The quick ratio for the same period was 1.9, suggesting that even without relying on inventory, the company can comfortably meet its short-term obligations.

Analysis of Working Capital Trends:

Working capital, defined as current assets minus current liabilities, reflects a company's operational efficiency and short-term financial health. Monitoring trends in working capital can reveal whether a company is effectively managing its resources.

• CVCO's working capital has shown a positive trend, increasing from $737.4 million in 2023 to $833.1 million in 2024.
• This increase indicates improved short-term financial health and efficient management of current assets and liabilities.

Cash Flow Statements Overview:

Cash flow statements provide a comprehensive view of all cash inflows and outflows, categorized into operating, investing, and financing activities. Analyzing these trends helps understand how CVCO generates and uses cash.

• Operating Cash Flow: This indicates the cash generated from the company's core business operations. In 2024, CVCO reported an operating cash flow of $239.3 million, a decrease compared to $299.4 million in 2023.
• Investing Cash Flow: This includes cash used for investments in assets like property, plant, and equipment (PP&E). CVCO's investing cash flow in 2024 was -$79.9 million, primarily due to capital expenditures.
• Financing Cash Flow: This involves activities related to debt, equity, and dividends. In 2024, CVCO's financing cash flow was -$67.1 million, mainly driven by stock repurchases.

Potential Liquidity Concerns or Strengths:

While CVCO exhibits strong liquidity ratios, it's essential to consider potential concerns and strengths based on cash flow trends and working capital management.

• Strengths: The high current and quick ratios indicate a robust ability to meet short-term obligations.
• The increasing working capital further supports the company's liquidity position.
• Concerns: The decrease in operating cash flow from 2023 to 2024 could signal potential challenges in generating cash from core operations, warranting further monitoring.

Here’s a summary of Cavco Industries, Inc.’s key financial data:

For more detailed insights, you can read the full analysis here: Breaking Down Cavco Industries, Inc. (CVCO) Financial Health: Key Insights for Investors

Cavco Industries, Inc. (CVCO) Valuation Analysis

When evaluating whether Cavco Industries, Inc. (CVCO) is overvalued or undervalued, several key financial ratios and indicators come into play. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios (if applicable), and analyst consensus.

Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: As of March 15, 2025, Cavco Industries' P/E ratio (TTM) is 25.00. This is calculated using a share price of $508.09 and earnings per share (diluted) for the trailing twelve months (TTM) ended in December 2024 of $20.32. Historically, Cavco's P/E ratio has ranged from a minimum of 6.89 to a maximum of 34.58 over the past 13 years, with a median of 25.08.
• Price-to-Book (P/B) Ratio: Cavco Industries' price-to-book ratio peaked in December 2024 at 3.5x. In 2024, the P/B ratio was 3.3x, representing a 14.2% increase.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: As of April 1, 2025, Cavco Industries' EV/EBITDA is 16.45. This is based on an EBITDA of $231 million for 2024. Over the past 13 years, the EV/EBITDA has ranged from a minimum of 4.66 to a maximum of 23.55, with a median of 14.89.

Stock Price Trends:

• The latest closing stock price for Cavco Industries as of April 17, 2025, is $477.75.
• The all-time high closing price was $539.10 on February 18, 2025.
• The 52-week high is $544.08, while the 52-week low is $331.08.
• The average stock price for the last 52 weeks is $435.39.

Dividend Yield and Payout Ratios:

• Cavco Industries does not currently pay dividends. Therefore, the dividend yield is 0%.

Analyst Consensus:

• The consensus price target for Cavco Industries is $487.5, based on the ratings of 3 analysts.
• The high price target is $495, issued by Craig-Hallum on November 4, 2024.
• Analysts' recommendations include ratings such as 'Outperform' and 'Buy,' with some downgrades to 'Neutral' also noted.

Here is a summary of analyst ratings for Cavco Industries, Inc. (CVCO):

For more insights into Cavco Industries, Inc., consider exploring their investor profile: Exploring Cavco Industries, Inc. (CVCO) Investor Profile: Who’s Buying and Why?

Cavco Industries, Inc. (CVCO) Risk Factors

Cavco Industries, Inc. (CVCO) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges detailed in their financial reports.

One of the primary external risks is the intense competition within the manufactured housing industry. This competition can pressure profit margins as companies vie for market share. Regulatory changes also pose a significant threat. Changes in building codes, zoning laws, or financing regulations can increase costs or limit the company's ability to operate in certain markets. Market conditions, particularly fluctuations in interest rates and the availability of credit, directly affect demand for manufactured homes, impacting sales and profitability.

Internally, Cavco faces operational, financial, and strategic risks. Operational risks include managing production costs, ensuring quality control, and maintaining an efficient supply chain. Financial risks involve managing debt levels, interest rate exposure, and the potential for impairment of assets. Strategic risks encompass the successful integration of acquisitions and the execution of long-term growth plans.

To mitigate these risks, Cavco Industries, Inc. (CVCO) employs several strategies. These may include:

• Diversifying product offerings to appeal to a broader range of customers.
• Investing in technology to improve efficiency and reduce costs.
• Building strong relationships with suppliers to ensure a stable supply chain.
• Closely monitoring regulatory developments and adapting business practices accordingly.
• Maintaining a strong balance sheet to provide financial flexibility.

For additional insights into Cavco's strategic direction, see: Mission Statement, Vision, & Core Values of Cavco Industries, Inc. (CVCO).

A detailed look into the company's 2024 fiscal year filings would provide more specific examples of these risks and the strategies Cavco is using to address them. Investors should review these filings carefully to understand the potential impact on the company's financial performance.

Cavco Industries, Inc. (CVCO) Growth Opportunities

Cavco Industries, Inc. (CVCO) demonstrates promising future growth prospects driven by several key factors. These include strategic acquisitions, market expansion, and innovative product offerings that cater to evolving consumer demands.

Key growth drivers for Cavco Industries, Inc. (CVCO) include:

• Strategic Acquisitions: Actively acquiring businesses to expand market presence and product offerings.
• Market Expansion: Tapping into new geographic markets and demographics to increase sales volume.
• Product Innovation: Developing new home designs and features to meet changing customer preferences.

Future revenue growth projections and earnings estimates for Cavco Industries, Inc. (CVCO) reflect a positive trajectory. While specific figures can fluctuate based on market conditions, analysts generally anticipate continued growth, driven by strong demand for affordable housing solutions.

Strategic initiatives and partnerships that may drive future growth include:

• Retailer Network Expansion: Broadening the network of independent retailers to enhance distribution.
• Vertical Integration: Strengthening control over the supply chain to improve efficiency and reduce costs.
• Sustainable Practices: Incorporating eco-friendly materials and construction methods to appeal to environmentally conscious buyers.

Cavco Industries, Inc. (CVCO) holds several competitive advantages that position it favorably for future growth:

• Diversified Product Portfolio: Offering a range of housing options, including manufactured homes, modular homes, and park model RVs.
• Strong Brand Reputation: Building trust and loyalty through quality products and customer service.
• Economies of Scale: Leveraging size and scale to achieve cost efficiencies and competitive pricing.

To contextualize Cavco Industries, Inc. (CVCO)'s growth opportunities, it's useful to consider its performance and market position relative to its peers. The following table provides a comparative overview:

These figures, based on the latest available data for the 2024 fiscal year, illustrate Cavco Industries, Inc. (CVCO)'s strong performance compared to its industry counterparts.

For more insights into Cavco Industries, Inc. (CVCO), consider exploring this resource: Exploring Cavco Industries, Inc. (CVCO) Investor Profile: Who’s Buying and Why?