Cavco Industries, Inc. (NASDAQ:CVCO) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 2.4% short of analyst estimates at US$1.8b, and statutory earnings of US$18.37 per share missed forecasts by 2.5%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Cavco Industries' three analysts is for revenues of US$1.91b in 2025. This reflects a credible 6.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 5.3% to US$20.07. Before this earnings report, the analysts had been forecasting revenues of US$1.96b and earnings per share (EPS) of US$22.46 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
The analysts made no major changes to their price target of US$407, suggesting the downgrades are not expected to have a long-term impact on Cavco Industries' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Cavco Industries analyst has a price target of US$425 per share, while the most pessimistic values it at US$382. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Cavco Industries' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.4% annually. Factoring in the forecast slowdown in growth, it looks like Cavco Industries is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cavco Industries. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Cavco Industries analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Cavco Industries' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.