Download PDF

1. Company Snapshot

1.a. Company Description

Skyline Champion Corporation produces and sells factory-built housing in North America.The company offers manufactured and modular homes, park models RVs, accessory dwelling units, and modular buildings for the multi-family and hospitality sectors.It builds homes under the Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, and Titan Homes brands in the United States; and Moduline and SRI Homes brand names in western Canada.


The company also provides construction services to install and set-up factory-built homes; operates Titan Factory Direct, a factory-direct manufactured home retail business with 18 sales centers in the southern United States; and engages in the transportation of manufactured homes and recreational vehicles.The company was founded in 2010 and is headquartered in Troy, Michigan.

Show Full description

1.b. Last Insights on SKY

Champion Homes' recent performance was driven by its Q3 2026 earnings release, which highlighted a 1.8% increase in net sales to $656.6 million. The company sold 6,270 U.S. homes, with an average selling price increase. Additionally, Skyline Homes, a Champion Homes brand, was named America's Most Trusted Manufactured Home Builder for six consecutive years. Institutional investors, such as Edgestream Partners and Tensile Capital Management, have also taken positions in the company, with the latter acquiring $23.5 million worth of shares.

1.c. Company Highlights

2. Champion Homes' Q3 Earnings: A Resilient Performance Amidst Challenges

Champion Homes reported a fiscal third-quarter performance that was in line with expectations, despite a challenging consumer environment. Net sales increased 2% year-over-year to $657 million, driven by a 5% increase in the average selling price per U.S. home sold to $99,300, which offset a 2% decrease in total homes sold to 6,485 homes. However, consolidated gross profit decreased 5% to $172 million, resulting in a gross margin of 26.2%. The company's net income attributable to Champion Homes decreased 12% year-over-year to $54 million, or $0.97 per diluted share, beating analyst estimates of $0.83. Adjusted EBITDA was $75 million, a decrease of 10% compared to the prior year.

Publication Date: Feb -09

📋 Highlights
  • 2% net sales growth: to $657M, offset by 2% fewer homes sold (6,485).
  • 5% higher average home price: ($99,300) driven by multi-section product mix.
  • 12% net income decline: to $54M ($0.97/share), impacted by $110M SG&A surge from Iseman acquisition.
  • $50M share buybacks: returned to shareholders, with $100M operating cash flow generated.
  • 4thQ guidance: forecasts low single-digit revenue growth and 25-26% gross margin, with Triad sale expected to yield CAD 189M mid-2024.

Operational Highlights

The company saw new consumers entering the offsite-build homes market, driving growth. Geographically, nothing unusual occurred between quarters. However, weather-related delays impacted production days, and the goal is to make up for these losses within the quarter. The team executed well with channel partners, leveraging digital investments and evolving products.

Guidance and Outlook

For the fourth quarter, revenue is expected to be up low single digits, with a gross margin in the 25% to 26% range. The company guided for growth in the fourth quarter, with a solid quarter and a focus on executing with new products. The pricing environment remains stable, with no deterioration. The spring selling season shows a pulse of order growth, with a year-over-year growth signaled for the start of the calendar year.

Valuation and Return Metrics

With a P/E Ratio of 22.12 and an EV/EBITDA of 12.51, the company's valuation appears reasonable. The ROE of 13.59% and ROIC of 11.4% indicate a strong return on equity and invested capital. Analysts estimate next year's revenue growth at 3.2%, which suggests a stable outlook for the company.

Legislative Developments and Strategic Focus

The company is encouraged by policy discussions around affordable housing, including the "Trump Homes" program, which aligns with their strategic focus on off-site built homes. They are positioned to realize opportunities from this initiative. The House bill includes HUD code homes without a chassis, while the Senate bill does not, and the company is encouraged by bipartisan support and prepares for potential changes.

Capital Allocation and Shareholder Returns

The company generated $100 million of operating cash flows and returned $50 million to shareholders through share repurchases. The company will continue to assess capital allocation, prioritizing investments that drive the highest return for shareholders. The Free Cash Flow Yield of 5.56% is attractive, indicating a decent return for shareholders.

3. NewsRoom

Card image cap

Champion Homes, Inc. (SKY) Q3 2026 Earnings Call Transcript

Feb -04

Source: seekingalpha.com

Card image cap

Champion Homes Announces Third Quarter Fiscal 2026 Results

Feb -03

Source: businesswire.com

Card image cap

Skyline® Homes Awarded America's Most Trusted® Manufactured Home Builder 6 Years in a Row 2021-2026; Family of Champion® Homes Brands Sweeps Top Three Rankings

Jan -28

Source: businesswire.com

Card image cap

Champion Homes Announces Third Quarter Fiscal Year 2026 Earnings Release Date and Conference Call

Jan -20

Source: businesswire.com

Card image cap

3 Stocks Built for America's Affordable Housing Reality

Jan -17

Source: marketbeat.com

Card image cap

Joseph Kimmell Sells 1,800 Shares of Champion Homes (NYSE:SKY) Stock

Dec -17

Source: defenseworld.net

Card image cap

Why One Fund Just Put $23.5 Million Into Champion Homes Despite an 18% Stock Slide

Dec -07

Source: fool.com

Card image cap

Edgestream Partners L.P. Takes Position in Champion Homes, Inc. $SKY

Dec -06

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.16%)

6. Segments

United States Factory-built Housing

Expected Growth: 1.2%

The 1.2% growth in United States Factory-built Housing from Skyline Champion Corporation is driven by increasing demand for affordable housing, government initiatives to promote affordable housing, and rising popularity of modular homes. Additionally, the company's strategic expansion into new markets, cost-saving initiatives, and innovative product offerings have contributed to the growth.

Canadian Factory-built Housing

Expected Growth: 0.8%

The 0.8 growth rate of Canadian Factory-built Housing from Skyline Champion Corporation is driven by increasing demand for affordable housing, government incentives for eco-friendly modular homes, and a shortage of skilled labor in traditional construction. Additionally, the company's strategic expansion into Western Canada and partnerships with local builders have contributed to this growth.

Corporate/Other

Expected Growth: 0.5%

The 0.5 growth in Corporate/Other segment of Skyline Champion Corporation is driven by increased investments in technology and process improvements, leading to enhanced operational efficiency and cost savings. Additionally, the company's focus on strategic acquisitions and partnerships has contributed to the growth, along with favorable market conditions and a strong balance sheet.

7. Detailed Products

Manufactured Homes

Skyline Champion Corporation offers a wide range of manufactured homes, designed to provide affordable and comfortable living solutions for individuals and families.

Modular Homes

The company's modular homes offer a flexible and efficient way to build custom homes, with the ability to design and construct homes in a factory-controlled environment.

Park Model RVs

Skyline Champion's park model RVs are designed for recreational use, providing a comfortable and convenient way to enjoy outdoor activities.

Tiny Homes

The company's tiny homes offer a compact and efficient living solution, perfect for those who want to downsize or live more simply.

Commercial Modular Buildings

Skyline Champion's commercial modular buildings provide a flexible and efficient way to construct commercial buildings, such as offices, schools, and healthcare facilities.

8. Skyline Champion Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Skyline Champion Corporation is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is low for Skyline Champion Corporation due to the lack of concentration of buyers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Skyline Champion Corporation due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants is high for Skyline Champion Corporation due to the low barriers to entry in the market.

Intensity Of Rivalry

The intensity of rivalry is high for Skyline Champion Corporation due to the presence of several competitors in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 7.54%
Debt Cost 11.64%
Equity Weight 92.46%
Equity Cost 11.64%
WACC 11.64%
Leverage 8.15%

11. Quality Control: Skyline Champion Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Green Brick Partners

A-Score: 5.5/10

Value: 6.8

Growth: 8.3

Quality: 7.9

Yield: 0.0

Momentum: 4.5

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Tri Pointe Homes

A-Score: 5.2/10

Value: 8.0

Growth: 8.2

Quality: 6.0

Yield: 0.0

Momentum: 2.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Taylor Morrison

A-Score: 5.1/10

Value: 8.0

Growth: 5.7

Quality: 6.4

Yield: 0.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
Century Communities

A-Score: 5.1/10

Value: 8.0

Growth: 7.6

Quality: 4.7

Yield: 3.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Skyline Champion

A-Score: 4.0/10

Value: 3.8

Growth: 6.8

Quality: 7.0

Yield: 0.0

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
Dream Finders Homes

A-Score: 3.8/10

Value: 6.6

Growth: 6.4

Quality: 4.5

Yield: 0.0

Momentum: 2.0

Volatility: 3.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

90.12$

Current Price

90.12$

Potential

-0.00%

Expected Cash-Flows