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Cavco Industries, Inc. (CVCO) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Cavco Industries, Inc. (CVCO)

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Intrinsic Value (DCF)

Current$692.78
→
Intrinsic$608.40
-12%
$426.52$608.40$953.69
Market implies 24% growth for 5 years
CVCO appears fairly valued — current price aligns with our DCF estimate.
At $693, the market prices in continued strong cash flow growth (24%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $427 → Bull $954. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →17%19%21%23%
8%$734$792$853$919
10%$527$566$608$653
12%$412$441$473$506
14%$339$363$387$413

Bull Case

  • Bull case ($954) offers 38% upside at 25% growth, 9% discount

Bear Case

  • Bear case ($427) implies 38% downside at 17% growth, 12% discount
  • Using 21% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$189.51M
Year 2$228.65M
Year 3$275.87M
Year 4$332.85M
Year 5$401.59M
Terminal$5.91B

📐 Model Inputs

Growth Rate20.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$157.07MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is CVCO stock undervalued or overvalued?
🟡 FAIRLY VALUED

CVCO trades at $692.78, within 10% of our $594.34 intrinsic value estimate. At 10.0% WACC and 20.7% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $402.79 (bear) to $876.42 (bull).

What is CVCO's intrinsic value?

Using a 5-year DCF model: Base FCF of $157M, projected at 20.7% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-311M net debt and dividing by 0.01B shares: Bear $402.79 | Base $594.34 | Bull $876.42. Current price $692.78 implies -1% to base case.

How is CVCO's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.7% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($4.60B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.