Cavco Industries Inc. Common Stock When Issued (CVCO)

FairStock Score: 57/100 — STEADY

Key Financials

Strengths

• Generates $112 million in annual free cash flow (2.7% yield on market cap)
• Solid return on equity of 17.2% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.04, providing financial flexibility
• Altman Z-Score of 8.7 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($269) with negative 99% margin of safety—limited downside protection

AI Analysis

Cavco Industries Inc. Common Stock When Issued is a small-cap consumer cyclical company valued at $4.2 billion. The business generates $2.2 billion in annual revenue with a 2.0% net margin and $112 million in free cash flow. From a quality standpoint, Cavco shows Altman Z-Score of 8.7 confirms fortress-level solvency and adequate 17% ROE. On valuation, the stock is reasonably priced at 23.2x earnings, with trades above its Graham Number with a negative 99% margin. Growth dynamics show revenue growing at 11.3% and profit growth of -21.9%. Our composite FairStock Score of 57/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $112 million in annual free cash flow (2.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer cyclical space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer