Champion Homes (NYSE:SKY) Issues Earnings Results

Key Points

• Champion Homes (NYSE:SKY) reported quarterly earnings per share of $1.19, significantly exceeding the consensus estimate of $0.88 and marking a year-over-year increase from $0.91.
• The company announced a $50 million share repurchase program, indicating management's belief that the stock is undervalued.
• Despite positive earnings, several analysts have lowered their price targets for the stock, with an average consensus target of $80.60 and a rating of "Hold".

Champion Homes (NYSE:SKY - Get Free Report) posted its quarterly earnings data on Tuesday. The company reported $1.19 EPS for the quarter, topping analysts' consensus estimates of $0.88 by $0.31, Zacks reports. Champion Homes had a return on equity of 14.35% and a net margin of 8.50%. The business had revenue of $701.32 million for the quarter, compared to analyst estimates of $642.18 million. During the same period in the previous year, the company posted $0.91 earnings per share. The firm's revenue for the quarter was up 11.7% on a year-over-year basis.

Champion Homes Price Performance

SKY traded down $1.44 during midday trading on Friday, reaching $66.06. 557,833 shares of the company's stock were exchanged, compared to its average volume of 637,534. The company has a quick ratio of 1.61, a current ratio of 2.39 and a debt-to-equity ratio of 0.02. The business has a 50-day simple moving average of $64.60 and a two-hundred day simple moving average of $82.17. The firm has a market capitalization of $3.78 billion, a price-to-earnings ratio of 17.57 and a beta of 1.13. Champion Homes has a one year low of $59.44 and a one year high of $116.49.

Wall Street Analysts Forecast Growth

A number of brokerages have weighed in on SKY. Barclays increased their price target on shares of Champion Homes from $72.00 to $74.00 and gave the company an "equal weight" rating in a report on Thursday. Royal Bank Of Canada upped their price objective on shares of Champion Homes from $82.00 to $85.00 and gave the company a "sector perform" rating in a research report on Thursday. Finally, Zelman & Associates upgraded Champion Homes from a "strong sell" rating to a "hold" rating in a research note on Thursday, June 5th. Four research analysts have rated the stock with a hold rating and one has given a buy rating to the company's stock. According to data from MarketBeat, Champion Homes has an average rating of "Hold" and a consensus target price of $86.00.

Champion Homes declared that its board has initiated a stock buyback program on Friday, May 30th that allows the company to repurchase $50.00 million in shares. This repurchase authorization allows the company to buy up to 1.3% of its shares through open market purchases. Shares repurchase programs are typically a sign that the company's leadership believes its stock is undervalued.

Hedge Funds Weigh In On Champion Homes

A number of hedge funds have recently modified their holdings of SKY. AQR Capital Management LLC bought a new stake in Champion Homes in the first quarter valued at $294,000. Royal Bank of Canada boosted its stake in shares of Champion Homes by 66.1% in the 1st quarter. Royal Bank of Canada now owns 10,804 shares of the company's stock valued at $1,024,000 after purchasing an additional 4,301 shares in the last quarter. Finally, Millennium Management LLC grew its holdings in shares of Champion Homes by 712.0% in the 1st quarter. Millennium Management LLC now owns 70,029 shares of the company's stock worth $6,636,000 after purchasing an additional 61,405 shares during the last quarter.

Champion Homes Company Profile

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.