Breaking Down Cavco Industries, Inc. (CVCO) Financial Health: Key Insights for Investors

You're looking at Cavco Industries, Inc. (CVCO) because the affordable housing crisis has made manufactured homes a compelling investment, but you need to know if the financials actually support the stock's premium price tag, so let's cut straight to the numbers. The company closed its Fiscal Year 2025 (FY2025) with net revenue hitting a solid $2,015 million, a 12.3% jump, and delivered diluted earnings per share (EPS) of $20.71, showing their operational strength is defintely translating to the bottom line. Plus, they returned capital to shareholders with roughly $150 million in stock repurchases, a clear signal of management confidence. Here's the quick math: that performance has pushed the stock up 27% year-to-date, but it also means the market is pricing in a lot of future growth, with the current valuation sitting well above the industry average. We need to dig into the sustainability of that 9% net profit margin and the risk in their Financial Services segment, which is why a simple glance at the headline numbers isn't enough. We're paying a premium; we need to know what we're buying.

Revenue Analysis

You need to know where Cavco Industries, Inc. (CVCO) is actually making its money, and the simple answer is: housing, but the story is more complex. For the full Fiscal Year 2025, which ended March 29, 2025, Cavco Industries, Inc. delivered total net revenue of over $2,015 million, marking a solid 12.3% increase from the prior year's $1,795 million. This growth is a clear signal that the company is effectively capitalizing on the persistent demand for affordable housing in the U.S. market.

The company's revenue streams break down into two main segments: Factory-Built Housing and Financial Services. The Factory-Built Housing segment is the engine, driving the vast majority of that $2.015 billion total. The revenue increase for the year was primarily fueled by higher home sales volume, which is exactly what you want to see from a manufacturer. In the near term, the momentum looks strong, with the most recent quarterly net revenue (Q1 Fiscal Year 2026, ended June 28, 2025) hitting $557 million, a 16.6% jump year-over-year.

Here's the quick math on what's driving the business:

• Factory-Built Housing: Primary revenue source, driven by home sales volume. Full-year Fiscal 2025 gross profit margin was 22.9%.
• Financial Services: Provides ancillary revenue from insurance and loan sales. This segment is smaller but highly profitable when stable.

What this estimate hides is the volatility in the Financial Services segment (which includes their insurance operations). While the Factory-Built Housing segment is a model of consistent performance, the Financial Services side can swing wildly. For instance, in Q1 Fiscal Year 2025, the Financial Services segment reported a gross loss of (0.6%) due to unusually high insurance claims from major weather events in Texas and wildfires in New Mexico. Yet, by Q3 Fiscal Year 2025, that gross profit margin had soared to a highly profitable 55.5%. [cite: 1 (from first search)]

This massive swing-from a loss to a high-fifty percent margin-shows the risk. You defintely need to track weather-related claims as a key risk factor for overall profitability, even if the housing business is solid. The full-year revenue for the Financial Services segment actually saw a decrease, mainly because of fewer loan sales, despite higher insurance premiums. This is a segment that introduces non-construction risk, and it needs to be managed tightly. To understand the core mission that anchors this strategy, you can read more here: Mission Statement, Vision, & Core Values of Cavco Industries, Inc. (CVCO).

Actionable Insight: Monitor the Financial Services segment's gross profit margin quarterly. If it dips below 15% for two consecutive quarters, it's a sign that the ancillary business is becoming a drag on the core housing operation.

Profitability Metrics

Looking at Cavco Industries, Inc. (CVCO)'s fiscal year 2025 results, the core takeaway is that the company is highly profitable and growing its pre-tax dollar earnings, even as margin percentages face minor pressure. This is a sign of strong operational efficiency (cost management) meeting solid demand.

For the fiscal year ended March 29, 2025, Cavco Industries reported total Net Revenue of over $2.015 billion, a 12.3% jump from the prior year. Net Income for the year was $171.0 million. Here's the quick math on the key profitability ratios, which are the real measure of how well management is converting sales into profit:

• Gross Profit Margin (Factory-built housing): 22.9%
• Operating Profit Margin (Income Before Taxes): 10.5% (Calculated: $211M / $2,015M)
• Net Profit Margin: 8.5%

The Operating Profit Margin is calculated using Income Before Income Taxes of $211 million, which increased 6.0% year-over-year-a solid dollar gain. You want to see the bottom line growing, and it is.

Margin Trends and Operational Efficiency

While the dollar profits are up, the margin percentages show a slight softening, which is a key trend to watch. The Net Profit Margin dipped from 8.8% in fiscal year 2024 to 8.5% in fiscal year 2025. Similarly, the Gross Profit Margin for the core factory-built housing segment decreased slightly from 23.2% to 22.9%.

This minor margin contraction points to rising costs of goods sold or increased selling, general, and administrative (SG&A) expenses outpacing the 12.3% revenue growth. It's a classic sign of inflationary pressure on raw materials or labor, or a strategic increase in sales and marketing to capture market share. The drop is small, but it means operational efficiency (how well they manage costs to produce profit) is under pressure.

Breaking Down Cavco Industries, Inc. (CVCO) Financial Health: Key Insights for Investors is a good place to see how these margins stack up against the company's balance sheet strength.

Industry Comparison: Cavco Industries vs. Peers

Cavco Industries operates in the Manufactured Housing Manufacturing industry, which is part of the broader Consumer Durables sector, an area often characterized by thin margins. Cavco Industries' margins hold up well against this backdrop, suggesting a competitive advantage in cost control and pricing power.

For a direct peer comparison, the Gross Profit Margin of 22.9% for Cavco Industries' factory-built housing segment is right in line with or slightly ahead of key competitors, where similar manufacturing gross margins hover around 22.8%. This tells you that Cavco Industries is managing its cost of production-lumber, steel, labor-as effectively as the best in the business.

The fact that Cavco Industries maintains a 10.5% Operating Profit Margin and an 8.5% Net Profit Margin in a cyclical industry dealing with high interest rates and volatile material costs is defintely a mark of a well-run operation.

Debt vs. Equity Structure

The key takeaway here is that Cavco Industries, Inc. (CVCO) runs an incredibly conservative balance sheet, relying almost entirely on equity and internally generated cash flow for growth. This is not a company that likes debt, which is a major strength in a volatile housing cycle.

As of the first fiscal quarter of 2026 (ended June 28, 2025), the company's total debt stood at just $30.19 million. To put that in perspective, their cash and equivalents were a massive $374.98 million in the same period, meaning Cavco Industries, Inc. operates with a substantial net cash position. They defintely prefer liquidity over leverage.

The company's debt is primarily composed of minor long-term obligations, with only about $7.26 million classified as Loan Capital in the June 2025 quarter. This minimal reliance on external borrowing is a hallmark of their financial discipline, especially when compared to other capital-intensive manufacturing or construction firms.

This conservative approach is best reflected in the Debt-to-Equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of its shareholders' equity. For Cavco Industries, Inc., this ratio is extremely low, indicating minimal risk for creditors.

Here's the quick math: a D/E ratio of 0.03 means that for every dollar of equity financing, the company uses only about three cents of debt. In the manufactured housing sector, where a D/E ratio between 1.0 and 2.5 is often seen as acceptable for growth, Cavco Industries, Inc. is an outlier. This structure provides a huge buffer against rising interest rates and economic slowdowns.

Instead of issuing new debt to fund expansion or return capital, Cavco Industries, Inc. has prioritized equity management. In the fiscal year ended March 29, 2025, the company repurchased approximately $150 million of its own stock, and their board approved an additional $150 million stock repurchase program in May 2025. This is a clear signal: they are using their strong cash flow to shrink the share count, boosting Earnings Per Share (EPS), rather than taking on new debt. If you want to dive deeper into who is holding those shares, you should check out Exploring Cavco Industries, Inc. (CVCO) Investor Profile: Who's Buying and Why?

The bottom line is that Cavco Industries, Inc. has the capacity to take on significant debt if a large, strategic acquisition opportunity arose, but their current policy is to run lean and return capital to shareholders via buybacks. They have maximum financial flexibility.

Liquidity and Solvency

You're looking at Cavco Industries, Inc. (CVCO) and want to know if they can cover their short-term debts. That's the right place to start, because a company can look profitable on paper but still get crushed by a liquidity crunch. For the fiscal year ended March 29, 2025, Cavco Industries' liquidity position is defintely a source of strength, showing a significant cushion against near-term obligations.

The key takeaway is that Cavco Industries has a very strong, liquid balance sheet. Their cash and near-cash assets far exceed their immediate liabilities. This gives management serious flexibility for capital deployment, whether that's for acquisitions, capital expenditures, or returning capital to shareholders.

Current and Quick Ratios: A Clear Liquidity Picture

The two primary metrics for short-term financial health are the Current Ratio and the Quick Ratio (also called the Acid-Test Ratio). Both tell you how easily a company can pay off its current liabilities with its current assets. For Cavco Industries in fiscal year 2025, the numbers speak for themselves:

• The Current Ratio (Current Assets / Current Liabilities) stands at 3.00.
• The Quick Ratio ((Current Assets - Inventory) / Current Liabilities) is 2.17.

Here's the quick math for the Current Ratio: with $910.19 million in Current Assets and $303.17 million in Current Liabilities, the ratio of 3.00 means the company has three dollars of liquid assets for every dollar of short-term debt. A ratio above 1.0 is generally considered healthy; a ratio this high is excellent. The Quick Ratio of 2.17 is also robust, indicating that even without selling any of their $252.7 million in Inventory, they could still cover their short-term obligations more than twice over. That's a very comfortable position to be in.

Working Capital and Cash Flow Trends

This strong ratio performance translates directly into a substantial Working Capital (Current Assets minus Current Liabilities) of $607.02 million at the close of FY2025. This is the capital available to fund day-to-day operations and growth initiatives. The trend here is positive, suggesting the company is effectively managing its operating cycle.

Looking at the cash flow statement for the full fiscal year 2025, we see a clear picture of capital generation and deployment:

The $178.50 million in Cash Flow from Operating Activities (CFO) is the engine driving this liquidity. The negative cash flow from financing activities, a $147.95 million net outflow, is largely attributable to the approximately $150 million in stock repurchases executed during the year [cite: 3, 7 in step 3]. This is a clear sign the company views its own stock as an attractive investment, using its excess cash to return value to shareholders, which is a significant strength.

Potential Liquidity Strengths and Actions

Cavco Industries' liquidity position is a major strength, not a concern. The high ratios and consistent CFO mean the company is highly resilient to economic downturns or unexpected spikes in raw material costs. They have the financial firepower to execute on their strategic plan, including new acquisitions or capacity expansion, without relying on external debt. For a deeper dive into the company's long-term strategy, check out the Mission Statement, Vision, & Core Values of Cavco Industries, Inc. (CVCO).

What this estimate hides, however, is the potential for inventory to become less liquid if the housing market slows dramatically. Still, given the affordable nature of factory-built homes, demand tends to hold up better than in the site-built market. The immediate action for you, the investor, is to recognize this exceptional balance sheet strength. It provides a wide margin of safety.

Valuation Analysis

You're looking at Cavco Industries, Inc. (CVCO) and wondering if the current price reflects its true value. The short answer is that the market is paying a premium for its consistent, high-quality earnings, suggesting a premium valuation right now.

The core of this assessment lies in comparing Cavco Industries, Inc.'s key valuation multiples against its industry peers. We're seeing a stock that's trading well above the average, which means investors are betting on continued, strong growth and margin expansion. This isn't necessarily a bad thing, but it does raise the bar for future performance.

Here's the quick math on the key ratios as of November 2025:

• Price-to-Earnings (P/E): The trailing P/E ratio sits at approximately 22.15x, which is significantly higher than the US Consumer Durables peer group average of just over 10x. This premium suggests the market expects Cavco Industries, Inc.'s earnings growth to outpace its peers defintely.
• Price-to-Book (P/B): The Price-to-Tangible Book Value (P/TBV) is around 4.49. This high multiple indicates investors value the company's assets and profitability well above their accounting book value, a common trait for companies with strong brands and operational efficiency.
• Enterprise Value-to-EBITDA (EV/EBITDA): This multiple, which accounts for debt (Enterprise Value) and operating profitability (EBITDA), is in the range of 14.48x to 15.38x. This is a healthy, but not cheap, valuation, reflecting solid operating cash flow generation.

Stock Price Trends and Investor Sentiment

Over the last 12 months, Cavco Industries, Inc. has shown significant volatility and upward momentum. The stock delivered an approximately 11.09% change over the past year. The 52-week trading range tells an important story, moving from a low of $393.53 (in June 2025) to a high of $602.57 (in October 2025). That's a 53% swing from low to high, showing strong investor interest but also sensitivity to market conditions.

The latest closing price is hovering around the $540-$558 range as of mid-November 2025. The company's fiscal year 2025 diluted net income per share was $20.71, with adjusted diluted net income per share at $21.63. This strong earnings performance is what's underpinning the current premium valuation.

Dividends and Analyst Consensus

If you are an income-focused investor, know that Cavco Industries, Inc. is a growth-oriented company that does not currently pay a dividend. The dividend yield and payout ratio are therefore 0.00%. Instead of dividends, the company has prioritized capital return through stock repurchases, authorizing an additional $150 million stock repurchase program in May 2025. This is a capital allocation strategy focused on boosting earnings per share (EPS) and supporting the stock price.

Analyst sentiment is generally cautious but positive. The consensus rating is split between a 'Hold' and a 'Moderate Buy'. The average price target from Wall Street analysts is set at $550.00. Since the current stock price is near or slightly above this target, it reinforces the 'Hold' perspective: the stock is fairly valued at its current growth trajectory, leaving little room for a significant near-term pop.

You can dive deeper into the operational details in the full post: Breaking Down Cavco Industries, Inc. (CVCO) Financial Health: Key Insights for Investors

What this estimate hides is the potential impact of housing market shifts or further acquisitions, which could quickly change the valuation landscape. Your clear action is to monitor Q2 2026 earnings for any signs of margin compression that would challenge the current 22x P/E multiple.

Risk Factors

You're looking at Cavco Industries, Inc. (CVCO) and seeing strong fiscal year 2025 numbers-Net Revenue hit $2,015 million, up 12.3% from the prior year, and diluted EPS was $20.71. That's a solid performance, but my two decades in this business tell me the real work is mapping the risks that could derail that momentum. The manufactured housing sector is cyclical, so we need to look past the current affordability tailwinds.

The biggest external risks for Cavco Industries, Inc. (CVCO) still center on the macro environment. First, there's the obvious one: customer demand and the availability of financing. Higher interest rates, even if they impact manufactured homes proportionally less than site-built homes, still reduce buying power and increase the risk of sales cancellations. Also, while the company's factory-built housing segment maintained a strong Gross profit as a percentage of Net revenue at 22.9% for the full fiscal year 2025, it was a slight compression from the prior year, suggesting persistent regional pricing pressure and higher competition, especially for lower-margin single-section homes.

• Manage customer demand and financing availability.
• Monitor raw material pricing, availability, and transportation costs.
• Navigate regulatory changes in manufactured housing and privacy laws.

Operational and Financial Volatility

The internal risks are often less visible on the surface. For Cavco Industries, Inc. (CVCO), the Financial Services segment introduced significant volatility in fiscal 2025. In the first quarter of fiscal 2025, the segment reported a gross loss of 0.6%, a sharp reversal from the prior year's profit. This was primarily due to high insurance claims from weather-related events, including a $5.2 million pretax net loss in Q1 FY2025 from the insurance operations alone. That's a clear example of how a diversified business model can introduce unexpected, high-impact risks.

Another operational challenge is the continued pressure on average selling prices (ASP). Even with home sales volume growth, the ASP declined, partly due to a product mix shift toward more single-wide homes. This means Cavco Industries, Inc. (CVCO) is selling more units, but at a lower margin per unit, which puts a premium on cost control and operational effeciency.

Here's the quick math on the housing segment's gross margin: it dipped from 23.2% in the prior year to 22.9% in FY2025. That's a small drop, but it's a trend we defintely need to watch in a competitive market.

Mitigation and Strategic Actions

The good news is that management is not sitting still. Strategically, the company has been unifying its various legacy brands under the single Cavco name. This move is designed to enhance operational flexibility, standardize product lines, and improve marketing efficiency, which should help mitigate the regional pricing pressures. You can read more about their focus here: Mission Statement, Vision, & Core Values of Cavco Industries, Inc. (CVCO).

Financially, the balance sheet is a rock-solid defense against macro risks, as Cavco Industries, Inc. (CVCO) operates with zero corporate debt. This gives them immense flexibility. Also, they are actively managing capital, repurchasing approximately $150 million of stock in fiscal 2025 and approving an additional $150 million program in May 2025. Operationally, they've invested in safety and training, dropping their OSHA total recordable incident frequency rate by 54% over the last five years, which is a key cost and liability control measure.

What this estimate hides is the risk of a high valuation premium. As of November 2025, Cavco Industries, Inc. (CVCO) trades at a P/E ratio of 22.1x, significantly above the industry average of 10.5x. This premium suggests investors are betting heavily on future growth, so any faltering in operational execution or a continued slip in margins could lead to a disproportionate pullback in the stock price. Your clear action here is to monitor the backlog, which stood at $197 million at the end of fiscal 2025, for any sustained decline.

Growth Opportunities

You're looking for a clear path to growth for Cavco Industries, Inc. (CVCO), and the numbers defintely point to a company capitalizing on a structural shift in the US housing market. The core takeaway is that their strategic moves in brand consolidation and targeted acquisitions are set to accelerate earnings growth well beyond their top-line revenue expansion.

In fiscal year 2025 (FY2025), which ended March 29, 2025, Cavco Industries, Inc. reported net revenue of $2.02 billion, an increase of 12% from the prior year. This is a solid base, but the real story is in the forward-looking estimates. Analysts project FY2026 revenue to hit approximately $2.31 billion, representing a growth of nearly 14.76%. The earnings per share (EPS) forecast is even stronger, jumping from FY2025's $20.71 to an estimated $25.56 for FY2026-a projected increase of 23.44%. That's a powerful signal of improving operational leverage and strategic synergy capture.

Strategic Initiatives and Market Expansion

Cavco Industries, Inc. is making deliberate moves to simplify its market presence and expand its geographic footprint. They understand that a fragmented brand portfolio can confuse customers and dilute national marketing efforts, so they've consolidated their various manufacturing brands under the single Cavco name. This strategic brand realignment, which incurred a non-cash charge of about $7.6 million to net income in the fourth quarter of fiscal 2025, is a short-term cost for a long-term gain in national recognition and digital marketing effectiveness. The new tagline, 'Where Exceptional Meets Affordable,' clearly defines their market position.

The company is also physically expanding into high-demand areas. The acquisition of American Homestar, completed in the first half of fiscal 2026, is a major growth driver. This move significantly establishes their presence in the high-growth South Central and Southeast regions, pushing their total market share to an estimated 15% and increasing their retail locations to 100. Here's the quick math: more efficient production plus a wider sales network equals higher EPS.

• Unifying brands simplifies the homebuying process.
• Acquiring American Homestar expands reach into high-growth Southern US.
• New market share is estimated to be 15% post-acquisition.

Competitive Advantages and Product Innovation

The biggest tailwind for Cavco Industries, Inc. isn't a new product, but the sheer unaffordability of traditional site-built homes. Factory-built housing is the most affordable form of unsubsidized homeownership, and the demand is massive, especially with persistent labor shortages in traditional construction. This is a structural advantage, not a cyclical one.

Plus, the company's vertical integration (controlling the supply chain from raw materials to manufacturing and sales) gives them a cost edge and better quality control. Their Financial Services segment, through their subsidiary CountryPlace, offers mortgages and insurance, making them a true one-stop shop for customers. This integrated offering helps generate recurring revenues and supports long-term net margin growth, which is a key differentiator from pure manufacturers. For more on their foundational approach, you can review the Mission Statement, Vision, & Core Values of Cavco Industries, Inc. (CVCO).

The operational side is also strong. Their factory-built housing gross profit margin was 22.9% in FY2025, and ongoing factory automation is expected to push profitability even higher. They also leverage environmental sustainability in their manufacturing process, which minimizes waste and appeals to the growing segment of environmentally conscious homebuyers. That's a smart way to attract a broader demographic.

The clear next step is to monitor the integration of American Homestar throughout fiscal 2026. Management: provide a detailed synergy realization report by the end of Q3 2026.