Skyline Champion Q2 Earnings: Can NYSE:SKY Hit Its $0.23 EPS Target?

in EARNINGS/INVESTING IDEAS by

Skyline Champion Corporation (NYSE:SKY) is scheduled to report Q2 earnings results after markets close for trading on October 27, 2020.

The company is expected to report earnings of $0.23/share on revenue of $320.1 million. The consensus earnings per share (EPS) of $0.23/share is based on a poll of 6 analysts and represents a decline in eps of −31.4% over the same quarter last year, when the company reported earnings of $0.34/share.

The revenue forecast of $320.1 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −9.7%. Last year the company reported $354.5 million in revenue for the quarter.

Expected to report EPS contraction of −31.4% for Q2, 2021
Metric Expected Prior Year YoY Change
Revenue $320.14 $354.46 −9.7%
EPS $0.23 $0.34 −31.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Skyline Champion Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q1, 2021 $0.01 $0.22 1,733.3% Beat
Q4, 2020 $0.20 $0.14 −31.7% Missed
Q3, 2020 $0.31 $0.32 4.6% Beat
Q2, 2020 $0.31 $0.34 10.9% Beat
Q1, 2020 $0.27 $0.35 28.4% Beat
Q4, 2019 $0.20 $0.26 28.7% Beat
Q3, 2019 $0.22 $0.27 25.0% Beat
Q2, 2019 $0.18 $0.23 30.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by increasing 10.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $25.62 $28.37 10.7% Increase
May 20, 2020 $22.33 $24.35 9.0% Increase
January 28, 2020 $35.92 $30.84 −14.1% Decline
October 30, 2019 $29.06 $28.23 −2.9% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.91, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.91 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Skyline Champion Corporation is currently trading at $27.22/share, up 2.0% for the day. The company is trading at approximately 73.5% of its 52-week high of $37.03/share. The company’s stock price is down −4.1% since the last earnings report and down −1.0% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 48.18 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:SKY Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 29.34 and a forward P/E multiple of 29.73.

Skyline Champion Corporation’s current share price also implies a price-to-book (P/B) multiple of 3.15. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2021.Q1
Period End Date June 27, 2020
Stock Price (Current) $27.22
P/E Ratio 29.3x
P/E Ratio (Fwd) 29.7x
PEG Ratio 0.1
Total Debt / Total Capital 7.4%
Levered Free Cash Flow $69.994 million
EV / EBITDA 14.8x

Finbox

Skyline Champion Corporation is a small-cap stock with a market capitalization of $1.542 billion and a total enterprise value of $1.426 billion. The company operates in the Consumer Discretionary sector and the Household Durables industry.

Skyline Champion Corporation operates as a factory-built housing company in North America. The company offers manufactured and modular homes, as well as park-models and modular buildings for the multi-family, hospitality, and senior and workforce housing sectors. It builds homes under the brand names of Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Excel Homes, Homes of Merit, New Era, Redman Homes, Shore Park, Silvercrest, Titan Homes in the United States, and Moduline and SRI Homes in western Canada. The company also operates a factory-direct retail business, Titan Factory Direct, with 21 retail locations in the southern United States. In addition, it provides transportation services to the manufactured housing and other industries. The company was founded in 2010 and is headquartered in Troy, Michigan.

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