Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 9.1 |
| EV/EBITDA | 3.5 |
| Fwd P/E | 6.4 |
| PEG | 9.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 20.1x
- ▸PEG: 0.67
SKY · Why this verdict
Why Champion Homes (SKY) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.6/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Champion Homes has beaten earnings estimates in 3 of the last 4 quarters and ranks as an industry growth leader in residential construction, but the stock has reached its analyst price target with only 0.3% remaining upside, carries a high debt-to-equity ratio of 9.2x, and recently posted its worst quarter with a miss of negative 17%, making new entry unattractive.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Champion Homes beat earnings per share estimates in 3 of the last 4 quarters with an average positive surprise of 17%, but the most recent quarter produced a meaningful miss of negative 17% compared to expectations, raising questions about whether the beat pattern has peaked. Earnings | EPS surprise returns to positive in each of the next 2 consecutive quarters, confirming the most recent miss was a one-quarter anomaly rather than the start of a trend. | →Stable |
| CounterThree beats in four quarters remains a strong record; the single recent miss likely reflects seasonal or one-time factors rather than structural demand deterioration. | ||
A debt-to-equity ratio of 9.2x — extremely high by any standard — creates meaningful financial risk if revenue softens, as fixed debt service costs remain constant while earnings can drop sharply in a housing downturn. Bear case | Debt-to-equity ratio declines to below 6.0x within 24 months through earnings-driven debt reduction or equity issuance. | →Stable |
| CounterChampion Homes' leverage may be a function of acquisition financing or inventory-heavy business model typical for manufactured housing; strong free cash flow quality score of 6.5 suggests debt service is not currently strained. | ||
At the current price of $78.61, the stock has essentially reached its analyst consensus price target of $78.88 with only 0.3% remaining upside and an asymmetry ratio near zero, leaving no margin of safety or reward for new entry. Warnings | Analyst consensus price target is revised to at least $90, more than 14% above current price, before the risk-reward becomes compelling for new positioning. | Tripped→Stable |
| CounterAnalyst targets in the manufactured housing sector can be conservative; continued earnings beats could prompt upward revisions that restore a more favorable upside target. | ||
Champion Homes ranks among the top performers in its residential construction peer group on growth metrics with a growth rank score of 8.75 out of 10, reflecting strong demand for manufactured and modular housing as an affordable alternative to site-built homes. Peer-rank breakdown | Growth rank remains above the 8th decile among residential construction peers for at least 2 of the next 4 reporting periods, confirming sustained market share advantage. | →Stable |
| CounterThe most recent quarter produced a significant earnings miss of negative 17%, suggesting demand conditions may be turning or cost pressures are emerging that could erode the growth leadership position. | ||
Champion Homes beat earnings per share estimates in 3 of the last 4 quarters with an average positive surprise of 17%, but the most recent quarter produced a meaningful miss of negative 17% compared to expectations, raising questions about whether the beat pattern has peaked.
→StableEarnings
- Expectation
- EPS surprise returns to positive in each of the next 2 consecutive quarters, confirming the most recent miss was a one-quarter anomaly rather than the start of a trend.
CounterThree beats in four quarters remains a strong record; the single recent miss likely reflects seasonal or one-time factors rather than structural demand deterioration.
A debt-to-equity ratio of 9.2x — extremely high by any standard — creates meaningful financial risk if revenue softens, as fixed debt service costs remain constant while earnings can drop sharply in a housing downturn.
→StableBear case
- Expectation
- Debt-to-equity ratio declines to below 6.0x within 24 months through earnings-driven debt reduction or equity issuance.
CounterChampion Homes' leverage may be a function of acquisition financing or inventory-heavy business model typical for manufactured housing; strong free cash flow quality score of 6.5 suggests debt service is not currently strained.
At the current price of $78.61, the stock has essentially reached its analyst consensus price target of $78.88 with only 0.3% remaining upside and an asymmetry ratio near zero, leaving no margin of safety or reward for new entry.
Tripped→StableWarnings
- Expectation
- Analyst consensus price target is revised to at least $90, more than 14% above current price, before the risk-reward becomes compelling for new positioning.
CounterAnalyst targets in the manufactured housing sector can be conservative; continued earnings beats could prompt upward revisions that restore a more favorable upside target.
Champion Homes ranks among the top performers in its residential construction peer group on growth metrics with a growth rank score of 8.75 out of 10, reflecting strong demand for manufactured and modular housing as an affordable alternative to site-built homes.
→StablePeer-rank breakdown
- Expectation
- Growth rank remains above the 8th decile among residential construction peers for at least 2 of the next 4 reporting periods, confirming sustained market share advantage.
CounterThe most recent quarter produced a significant earnings miss of negative 17%, suggesting demand conditions may be turning or cost pressures are emerging that could erode the growth leadership position.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.2 |
| ROA | 4.6 |
| Gross margin | 1.2 |
| Op margin | 3.4 |
| Net margin | 3.6 |
| Current ratio | 9.2 |
| FCF quality | 6.8 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
5.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.8 |
| EPS growth | 8.0 |
Momentum
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.5 |
| MACD | 0.0 |
| OBV | 4.4 |
| MA position | 4.0 |
| Volume | 2.7 |
- ▸Oversold in uptrend (RSI 22)
- ▸Above 200-day MA
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.7 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 20%
Insider
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
| notable moves | 3.0 |
- ▸Modest insider selling — $1,147,688 (0.025% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.7 |
| quality rank | 5.4 |
| growth rank | 6.7 |
- ▸Conservative debt levels
Technical
8.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.1 |
| 52w position | 7.4 |
Risk (lower is worse)
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.7 |
| days to cover | 6.1 |
| volatility | 4.9 |
| put call | 10.0 |
| implied vol | 4.6 |
| max pain risk | 7.0 |
| beta | 7.0 |
| debt equity | 9.7 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.6 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:54d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.9<4.5
- ASYMMETRY:0.8<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.76
Upside
+4.6%
Downside
6.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 8.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.9<4.5, ASYMMETRY:0.8<1.5@spot) reinforce the read. Current asymmetry R:R is 0.76 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.8, Catalyst at 7.2, and Risk (lower is worse) at 7.0; the weakest are Insider at 3.6, Momentum at 3.9, and Quality at 5.3. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.76 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Industry Growth Leader Manufactured Housing
Trip ifGrowth rank among residential construction peers falls below the 6th decile, indicating Champion Homes is losing competitive ground in manufactured housing demand.
- P2Earnings Delivery Mixed Recent Miss
Trip ifEPS surprise falls below negative 15% in at least 2 of the next 4 quarters, confirming the recent miss is the beginning of a deteriorating earnings pattern.
- P3High Leverage Constrains Financial Flexibility
Trip ifDebt-to-equity ratio rises above 11.0x, more than 20% above the already elevated current level of 9.2x, indicating financial leverage is increasing rather than declining.
- P4Price At Target Near Zero UpsideTripped
Trip ifStock price rises above $85, more than 8% above current price of $78.61, without analyst price target upgrades, making the already near-zero asymmetry become materially negative.