Champion Homes: Analysts Upgrade Forecasts After Strong Earnings Beat

Champion Homes, Inc. (NYSE: SKY) has recently reported strong earnings results, beating analyst forecasts and leading to an upgrade in analysts' predictions. The company's third quarter fiscal 2025 earnings report, released on February 4, 2025, showed impressive growth in revenue, earnings per share (EPS), and gross profit margin. Champion Homes' stock price has also been on an upward trajectory, increasing by 15.48% since the beginning of the year.

Analysts' Price Targets and Ratings
The average price target for Champion Homes has decreased to $90.2, with a low estimate of $64 and a high estimate of $106. The average target predicts a decrease of -13.17% from the current stock price of $103.88. The average analyst rating for Champion Homes is "Hold," indicating that analysts believe this stock is likely to perform similarly to the overall market.



Analysts' Revisions and Trends
Analysts have been revising their forecasts for Champion Homes, with the latest price target and rating action reported on February 6, 2025. Matthew Bouley of Barclays raised his price target to $106, maintaining his "Hold" rating. Mike Dahl of RBC Capital raised his price target to $96, maintaining his "Hold" rating. Greg Palm of Craig-Hallum raised his price target to $99, maintaining his "Strong Buy" rating.

Key Factors Driving Analysts' Revisions
Several key factors have driven analysts' revisions in their forecasts for Champion Homes:

1. Revenue Growth: Champion Homes has experienced significant revenue growth, with a 20.65% increase from the previous year to $2.44 billion in 2025. This growth is driven by an increase in demand across all sales channels, including an increase in the number of units sold through company-owned retail sales centers.
2. Gross Margin Expansion: Champion Homes has seen an expansion in its gross profit margin, from 25.3% in the third quarter of 2024 to 28.1% in the third quarter of 2025. This expansion is due to higher ASPs on new homes sold through company-owned retail sales centers, lower input costs, and acquisition synergy capture when compared to the prior-year period.
3. EPS Growth: Champion Homes' earnings per share (EPS) have increased by 30.9% to $1.06 in the third quarter of 2025 compared to the prior-year period. This growth is driven by higher sales and gross profit, partially offset by higher SG&A expenses.
4. Backlog and ASP Trends: Champion Homes has seen an increase in its backlog and average selling price (ASP) per U.S. home sold. The backlog increased by 7.6% compared to December 2023, and the ASP increased by 2.8% to $94,900. Analysts may be revising their forecasts to account for these positive trends in backlog and ASP.
5. Acquisition Synergy Capture: Champion Homes has successfully captured synergies from its acquisitions, contributing to its improved profitability. Analysts may be revising their forecasts to reflect the benefits of these synergies.

These factors align with Champion Homes' recent performance, as the company has demonstrated strong growth in revenue, gross margin expansion, and EPS growth. The positive trends in backlog and ASP, as well as the successful capture of acquisition synergies, further support the analysts' revisions in their forecasts.

In conclusion, Champion Homes' strong earnings performance and positive trends have led to an upgrade in analysts' predictions. As the company continues to grow and expand its profitability, investors should keep an eye on Champion Homes' stock price and consider the insights provided by analysts. However, it's essential to conduct thorough research and make informed decisions based on the company's fundamentals and your investment goals.