SKY
Champion Homes, Inc.
$79.68
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 20.9% above fair value
You pay
$79.68
Bear
$51.24
Fair
$65.88
Bull
$80.52
Bear
$51.24
-35.7%
$3.66 × 14x
Fair
$65.88
-17.3%
$3.66 × 18x
Bull
$80.52
+1.1%
$3.66 × 22x
Adjust Assumptions
18.0x
3.66$
Key Value Driver
Through-cycle normalized EPS ($3.66)
Implied Market Multiple
21.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$107.67
Divergence from AlphaVal
39%
Summary
Using 7-year normalized EPS of $3.66 at a 18x cycle multiple, the base-case value is $65.88 per share. P/TBV cross-check: 3.8x.
Warnings
Price-to-book value of 3.8x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $107.67 (from 9 analysts). Our estimate is 39% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing