What Happened?
Shares of modular home and building manufacturer Champion Homes (NYSE: SKY) jumped 14.2% in the afternoon session after the company reported strong fourth-quarter 2025 results that beat Wall Street's profit expectations.
The company posted an adjusted profit of $0.96 per share, easily surpassing analysts' consensus estimates of $0.84. Revenue for the quarter came in at $656.6 million, a 1.8% year-over-year increase that was in line with expectations. Investors were also encouraged by the company's operational performance, as adjusted EBITDA of $74.78 million beat forecasts by over 8%. Furthermore, Champion demonstrated strong cash generation, with its free cash flow margin rising to 14.1%, a significant improvement from 5.7% in the same quarter last year.
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What Is The Market Telling Us
Champion Homes’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Champion Homes and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 13.5% on the news that the company reported weak fiscal fourth-quarter 2025 results, which missed Wall Street's sales, EBITDA, and earnings estimates. Despite selling more homes at higher prices, adjusted EBITDA was weaker than expected even as sales climbed nearly 11%. Overall, this was a softer quarter with high expectations, which the company failed to meet.
Champion Homes is up 2% since the beginning of the year, but at $86.62 per share, it is still trading 19.9% below its 52-week high of $108.14 from February 2025. Investors who bought $1,000 worth of Champion Homes’s shares 5 years ago would now be looking at an investment worth $2,196.
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