Skyline Corporation designs, produces, and markets manufactured housing, modular housing, and park models to independent dealers and manufactured housing communities located in the United States and Canada. The company was founded in 1951 and is based in Elkhart, Indiana.
SKY Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for SKY, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Skyline Champion Corp ranked in the 90th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Skyline Champion Corp ended up being:
In the past 4.6 years, Skyline Champion Corp has a compound free cash flow growth rate of 1.15%; that's better than 96.52% of cash flow producing equities in the Consumer Cyclical sector, where it is classified.
The business' balance sheet suggests that 8% of the company's capital is sourced from debt; this is greater than only 18.32% of the free cash flow producing stocks we're observing.
SKY's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 43.72% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
PRTY, MLR, SIG, MSGN, and AGS can be thought of as valuation peers to SKY, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
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Skyline Champion Corporation (NYSE:SKY) ("Skyline Champion"), today announced financial results for its fourth quarter and full year ended March 28, 2020 ("fiscal 2020") and provided an update on business conditions as it responds to the impact of COVID-19.