Investment Thesis
Cavco Industries demonstrates exceptional financial health with strong profitability, robust cash generation, and zero debt leverage. The company's 12.3% revenue growth paired with 10.2% FCF margin and 107.4x interest coverage ratio indicates highly efficient operations and capital allocation in the resilient mobile home manufacturing sector.
Strengths
- Exceptional leverage position with zero long-term debt and 0.00x debt-to-equity ratio
- Strong cash generation with $172.8M free cash flow and 10.2% FCF margin
- Healthy profitability metrics: 23.6% gross margin, 10.5% operating margin, 8.7% net margin
- Solid liquidity with 2.49x current ratio and $224.6M cash reserves
- Quality earnings growth: 12.7% EPS growth with 12.3% revenue growth indicating operational leverage
Risks
- Net income growth flat year-over-year (0.0%) despite 12.3% revenue growth signals margin pressure or non-recurring charges
- Housing market cyclicality exposure; mobile home industry highly sensitive to interest rates and consumer credit conditions
- ROE of 13.6% and ROA of 10.1% are moderate for a debt-free company; capital efficiency could be improved
Key Metrics to Watch
- Revenue growth sustainability and gross margin trends in housing cycles
- Operating leverage and conversion of revenue growth to net income growth
- Return on equity improvement and capital deployment strategy with excess cash position
Financial Metrics
Revenue
1.7B
Net Income
148.1M
EPS (Diluted)
$18.55
Free Cash Flow
172.8M
Total Assets
1.5B
Cash
224.6M
Profitability Ratios
Gross Margin
23.6%
Operating Margin
10.5%
Net Margin
8.7%
ROE
13.6%
ROA
10.1%
FCF Margin
10.2%
Balance Sheet & Liquidity
Current Ratio
2.49x
Quick Ratio
1.60x
Debt/Equity
0.00x
Debt/Assets
26.0%
Interest Coverage
107.40x
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-23T06:08:10.673265 |
Data as of: 2025-12-27 |
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