Cavco Industries, Inc. (NASDAQ:CVCO) shareholders are probably feeling a little disappointed, since its shares fell 8.3% to US$383 in the week after its latest quarterly results. It was not a great result overall. Although revenues beat expectations, hitting US$478m, statutory earnings missed analyst forecasts by 13%, coming in at just US$4.11 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cavco Industries after the latest results.

See our latest analysis for Cavco Industries

Following the latest results, Cavco Industries' three analysts are now forecasting revenues of US$1.90b in 2025. This would be a satisfactory 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 5.1% to US$18.58. Before this earnings report, the analysts had been forecasting revenues of US$1.89b and earnings per share (EPS) of US$20.04 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$426, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Cavco Industries, with the most bullish analyst valuing it at US$430 and the most bearish at US$422 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Cavco Industries' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.6% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.8% annually. Even after the forecast slowdown in growth, it seems obvious that Cavco Industries is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cavco Industries. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$426, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Cavco Industries analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Cavco Industries' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com