Champion Homes heads into the final days of May with a sharp disconnect: the stock just posted its best week in months, yet two sell-side firms cut their price targets the same morning.
The options market tells the bullish side of that story loudest. The put/call ratio has collapsed to 0.13, nearly 1.4 standard deviations below its 20-day average of 1.74 — almost a mirror image of where it sat a month ago, when PCR routinely ran above 2.5 and touched 4.0 in April. Call buyers have flooded in. That shift has coincided with a 10% gain on the week, the stock recovering from $65 to $71.79, though it remains down about 12% over the past month and well off the year's high of $93.
Short positioning reinforces the constructive read — but only modestly. Short interest has edged down 9% over the past month to 4.6% of free float, a level that is meaningful but not alarming. The borrow market confirms there is no real squeeze pressure here: availability is running at roughly 2,530% of estimated short interest, meaning the lending pool is effectively unlimited relative to the position. Borrowing costs have crept up about 8% on the week to 0.40% annualised — still firmly in "low" territory. The ORTEX short score has held steady near 40 for the past two weeks, suggesting neither escalating conviction from short sellers nor a material covering wave.
The analyst reaction is the real story this week. Both Barclays and RBC Capital lowered their price targets on the morning of May 27, the day after SKY reported earnings. Barclays, maintaining its Overweight rating, trimmed from $106 to $94; RBC, keeping Outperform, moved from $101 to $92. The consensus target now averages $90.20, still a 26% premium to the current price at $71.79. Both cuts followed a weaker earnings picture: the bear case centres on EBITDA margins compressing to 10.5% and the company cutting its fiscal 2026 EBITDA estimate by 17% to $273 million. The direction of travel — two firms chopping targets while holding ratings — signals the Street still sees value but is marking down its conviction on the earnings power.
The bull case, meanwhile, leans on the 5% rise in average selling prices to $94.30 and the potential for lending conditions to ease, which could release demand in the manufactured housing market. ORTEX factor scores add some nuance: EPS momentum over 30 days ranks in only the 17th percentile, while the 90-day reading sits at the 36th — reflecting the downward earnings revisions that have dragged on the stock year-to-date. The PE multiple is near 19.4x, and EV/EBITDA at 11.5x, both having expanded slightly on the week as earnings came in below prior expectations.
Peer performance this week has been stronger across the board. Closest correlate CVCO gained 15.5% on the week and DFH surged nearly 16%, while TOL added 8.6% and CCS rose 7.5%. SKY's 10% gain lags the top names in its peer group, continuing a pattern where the stock captures the sector's upswings but at a discount — consistent with the company-specific margin concerns weighing on relative valuation.
Insider activity from late March adds a faint cautionary note. The CEO, CFO, and two executive vice presidents all sold shares in the final week of March, at prices around $72-$75 — essentially the current trading level. Total net insider sales over the 90-day window reached roughly $3.1 million. Individual transaction sizes were small (all rated significance 1 out of 10), suggesting routine planned disposals rather than a strategic statement, but the timing means insiders were not buying at what are now equivalent prices.
What to watch next: whether the earnings revision cycle has run its course, and whether the lending environment provides any uplift to shipment volumes that could stabilise the margin picture that the Street just revised lower.
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