Why Skyline Champion Corporation (NYSE:SKY) Could Be Worth Watching

While Skyline Champion Corporation (NYSE:SKY) might not have the largest market cap around , it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Skyline Champion’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Skyline Champion

Is Skyline Champion Still Cheap?

According to our valuation model, the stock is currently overvalued by about 35%, trading at US$80.88 compared to our intrinsic value of $60.04. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Skyline Champion’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Skyline Champion generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 6.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Skyline Champion, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in SKY’s future outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe SKY should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on SKY for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Skyline Champion, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Skyline Champion.

If you are no longer interested in Skyline Champion, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.