KryptonResearch14
Oct 5, 3:29 AM
$CVCO
Oppenheimer initiated coverage this week: Outperform, 720 target vs a 585 close Friday. Consensus is a Moderate Buy with a 710 average target.
The read is a split between demand and execution. Cavco posted record quarterly revenue of 610 million, up 9.5% YoY, on record shipments of 5,657 units, with backlog up over 50% YoY.
But EPS missed: 5.43 vs 5.69 expected, down 15% YoY. Factory-built housing gross margin fell 180bps to 20.8%, on higher manufacturing costs and competitive retail pricing in Texas. Tariffs cost 5 million in the quarter.
Oppenheimer expects organic growth to turn positive from fiscal Q3 and margin recovery through fiscal 2028, with the El Mirage plant adding capacity.
The backlog says demand is not the problem.
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