GRBK - Cavco Industries: Fair Performance Fair Valuation (Rating Downgrade)

2024-06-26 01:39:32 ET

Summary

• Cavco Industries reported FY2024 results with falling earnings as the housing market stayed weak with higher interest rates but still continued generating healthy earnings.
• The performance has been in line with peers over the longer term but has recently trailed peers by a slight margin.
• The company expects orders to pick back up in FY2025, as orders started to pick back up at the start of calendar year 2024.
• While an earnings recovery in FY2025 should start to elevate earnings, the valuation has only a very modest remaining upside.

Cavco Industries, Inc. ( CVCO ) has reported its whole FY2024 results, showing continued weakness as higher interest rates have persisted weakening the housing market. The company now expects a bit more upbeat revenues in upcoming quarters, though - while no guidance has been provided, the management seems to have noticed a recent pick up in orders....

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