Champion Homes has gotten torched over the last six months - since April 2025, its stock price has dropped 21.6% to $64.89 per share. This might have investors contemplating their next move.

Is there a buying opportunity in Champion Homes, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it’s free for active Edge members.

Why Is Champion Homes Not Exciting?

Even with the cheaper entry price, we're swiping left on Champion Homes for now. Here are three reasons we avoid SKY and a stock we'd rather own.

1. Lackluster Revenue Growth

Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. Champion Homes’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.4% over the last two years was well below its five-year trend.

2. EPS Took a Dip Over the Last Two Years

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

Sadly for Champion Homes, its EPS declined by 19.2% annually over the last two years while its revenue grew by 4.4%. This tells us the company became less profitable on a per-share basis as it expanded.

3. New Investments Fail to Bear Fruit as ROIC Declines

A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Champion Homes’s ROIC has unfortunately decreased significantly. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.

Final Judgment

Champion Homes isn’t a terrible business, but it isn’t one of our picks. Following the recent decline, the stock trades at 19.4× forward P/E (or $64.89 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now. Let us point you toward the most dominant software business in the world.

Stocks We Like More Than Champion Homes

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