Fact based stock research
Cavco Industries (NasdaqGS:CVCO)

US1495681074

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Cavco Industries stock research in summary

cavco.com

ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Cavco Industries (Homebuilding, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Cavco Industries are low in value (priced high) with a consolidated Value Rank of 9 (worse than 91% of alternatives). But they show above-average growth (Growth Rank of 81) and are safely financed (Safety Rank of 84, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Cavco Industries's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Cavco Industries exhibits low value (Obermatt Value Rank of 9), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 81). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 84) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	9
Growth Rank	81
Safety Rank	84
Combined Rank	67

Country	USA
Industry	Homebuilding
Index	NASDAQ
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Cavco Industries

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	12	17	11	9
GROWTH
GROWTH	82	100	59	81
SAFETY
SAFETY	88	83	80	84
SENTIMENT
SENTIMENT	n/a	63	77	^new
360° VIEW
360° VIEW	n/a	91	73	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 29-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Cavco Industries is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	12	17	11	9
GROWTH
GROWTH	82	100	59	81
SAFETY
SAFETY	88	83	80	84
COMBINED
COMBINED	51	86	53	67

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Cavco Industries the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 9 (worse than 91% compared with alternatives), Cavco Industries shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Cavco Industries. Price-to-Sales is 25 which means that the stock price compared with what market professionals expect for future profits is higher than 75% of comparable companies, indicating a low value concerning Cavco Industries's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 14, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Cavco Industries. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 23 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 9, is a sell recommendation based on Cavco Industries's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Cavco Industries? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Cavco Industries? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Cavco Industries may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	27	27	24	25
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	40	28	34	23
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	18	32	24	14
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	12	17	11	9

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cavco Industries; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2024, Cavco Industries shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Cavco Industries. Sales Growth has a rank of 58 which means that currently, professionals expect the company to grow more than 58% of its competitors. Capital Growth is also above 47% of competitors with a rank of 67, and Stock Returns with the rank of 95 is also an outperformance. Only Profit Growth is low with a rank of 47 which means that currently, professionals expect the company to grow its profits less than 53% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Cavco Industries is a good growth stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	61	72	61	58
PROFIT GROWTH
PROFIT GROWTH	26	77	34	47
CAPITAL GROWTH
CAPITAL GROWTH	n/a	79	77	67
STOCK RETURNS
STOCK RETURNS	92	89	53	95
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	82	100	59	81

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cavco Industries.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 84 (better than 84% compared with alternatives) for 2024, the company Cavco Industries has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cavco Industries is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Cavco Industries. Leverage is at a rank of 84, meaning the company has a below-average debt-to-equity ratio. It has less debt than 84% of its competitors. Liquidity is also good at a rank of 91, meaning the company generates more profit to service its debt than 91% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 42, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 58% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 84 (better than 84% compared with alternatives), Cavco Industries has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Cavco Industries. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Cavco Industries and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	86	82	82	84
REFINANCING
REFINANCING	34	46	46	42
LIQUIDITY
LIQUIDITY	73	84	86	91
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	88	83	80	84

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cavco Industries and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	49	100	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	11	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	27	39	^new
MARKET PULSE
MARKET PULSE	n/a	74	96	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	63	77	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cavco Industries.
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