PATRICK INDUSTRIES, INC. (PATK): what the price assumes

In the published model solve dated 2026-Q2, anchored at $87.50, PATRICK INDUSTRIES, INC. (PATK) is priced for +4.7% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/PATK

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.4% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.5pp.

How unusual the bet is: within-range

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Patrick Industries supplies components into five cyclical end markets, recreational vehicles, marine, powersports, manufactured housing, and industrial, so its results track the demand cycle in big-ticket discretionary goods rather than any single product.
• The structural growth lever is content per unit, the dollar value of Patrick parts in each RV or boat built, which rose 8% for RV and 17% for marine on a trailing-twelve-month basis even as wholesale unit shipments fell.
• The biggest specific risk is leverage into a downturn, the company carries roughly $1.3 billion of net debt, so the next read is whether marine and powersports strength keeps offsetting soft RV volumes through the first half of 2026.

Bull Case

The bear case writes itself for a company like this: it sells into recreational vehicles and boats, the most discretionary purchases a household makes, and those markets are deep in a shipment downturn. RV and manufactured-housing volumes fell in the most recent quarter on lower wholesale unit shipments. So the obvious read is a cyclical supplier caught in a cyclical trough. The data complicates that read in two ways that matter.

First, the diversification is working as designed. While RV and housing softened, marine revenue grew 14% and powersports grew 28% in the first quarter of 2026, enough that total sales held near flat at $997 million against $1,003 million a year earlier. Patrick has spent years deliberately spreading itself across markets that do not all trough at once, focusing on acquiring companies with strong management in its primary markets "The Company is focused on driving growth in its primary markets through the acquisition of companies with strong management teams", and the recent quarter is a live test it passed: five end markets, several pulling while others push, net result roughly flat through a genuine volume recession.

Second, content per unit is the growth engine that runs independent of the unit cycle. Even with fewer RVs and boats being built, Patrick is selling more dollars of parts into each one: RV content per unit rose 8% and marine content per unit rose 17% on a trailing-twelve-month basis. That is share gain inside a shrinking pie, and it is what lets revenue hold when shipments fall. The acquisitions feed the same flywheel, RecPro and the powersports expansion add product lines that raise the content opportunity per vehicle. The bull case is that the cyclical fear is real but already in the price, while the structural levers, diversification and rising content, are doing exactly what management built them to do, and the company is growing its dividend, up about 14% over the past year, while it does it.

Bear Case

The fragility in this story lives on the balance sheet, and it is the kind that only shows up when the cycle turns hard. Patrick Industries carries roughly $1.3 billion of net debt against trailing operating income, which puts leverage at nearly 5 times operating profit on the report's measure. The company's own measure, on an earnings-before-charges basis, is lower, but either number is the leverage of a roll-up acquirer, and the denominator is cyclical. In a deep RV and marine downturn, operating income compresses while the debt stays fixed, and a leverage ratio that looks manageable at the top of the cycle can become the dominant fact at the bottom.

That matters because the end markets are squarely discretionary and squarely cyclical. The company itself signals the timing risk, telling investors to expect the revenue-mix effects to persist into the first half of the year "We expect to continue to feel the effects of our revenue mix through the first half of 2025", a pattern that has carried into 2026 as RV and housing shipments stay soft. The bet embedded in the price is undemanding on its face, roughly 4.3% annual operating growth for five years, well within what the company has delivered. But that is the average across a cycle, and the price asks for it to be sustained without a serious volume air pocket. A levered supplier needs the units to keep coming; if a recession deepens the shipment decline beyond what content gains can offset, the same operating leverage that flatters good years bites in bad ones.

The valuation methods split in a way that confirms the tension. The relative-multiple and forward-growth lenses reach the price, but the asset and earnings-power methods read it as expensive, the company is not cheap on book value or on capitalized current earnings. That is the signature of a stock being valued on continued execution and continued acquisition, not on what the existing business is worth standing still. The dividend and the buyback are evidence of management confidence, but they also compete with debt service and acquisition spending for the same cash, and in a downturn that competition tightens. The bear does not need the company to break; it needs the cycle to do what cycles do to a levered, discretionary-demand supplier.

Valuation

The price asks for steady, ordinary growth, which is the right starting frame for a cyclical supplier. Inverting today's quote, the market pays about 16 times company-wide operating income, implying roughly 4.3% annual operating growth over five years. Against the company's own recent record, that pace is unremarkable; the demand it makes is on duration, that the growth persists across the next several years without a cyclical interruption that a discretionary-goods supplier cannot rule out.

The methods disagree along a familiar fault line. The relative-multiple lens, anchored on peer multiples in the auto-and-RV-supplier cohort where LCI Industries is the closest comparable, and the forward-growth cash-flow models both reach the price. The asset-value and earnings-power families sit below it, reading the stock as expensive on book value and on capitalized current earnings. The pattern says the price is justified by where the business is going and by what peers fetch, not by what the existing asset base or trailing profit is worth today. For a serial acquirer, that is internally consistent: the value is in the platform's ability to keep buying and integrating content, which the static methods cannot credit.

Solvency is where the cyclicality earns its scrutiny. Net debt of about $1.3 billion against trailing operating income puts leverage near 5 times on the report's basis, and while the company is not burning cash and the share count is roughly flat to lower, that leverage is the variable that governs the downside. The ratios are comfortable at mid-cycle volumes and tighten quickly in a trough, because the operating income in the denominator falls with shipments. The street's targets sit well above the quote, crediting a continuation of content gains and acquisition-driven growth that this frame treats as the bet rather than the base case. The decisive question for the price is not the multiple; it is whether the diversification and content levers can hold revenue steady through a soft-shipment stretch the company has told investors to expect.

Catalysts

The first quarter of 2026 was the diversification thesis on display. Net sales were $997 million, essentially flat against $1,003 million a year earlier, and earnings came in at $1.10 a share, a few cents ahead of expectations, while the revenue line fell just short. Underneath the flat headline, the mix shifted: marine revenue rose 14% and powersports rose 28%, offsetting lower RV and manufactured-housing volumes that reflected weaker wholesale industry shipments. Operating income held near $65 million and net income edged up to $39.5 million. The company also completed two small acquisitions in the quarter, continuing the bolt-on cadence.

Content per unit is the metric that turned a volume decline into flat revenue. On a trailing-twelve-month basis, RV content per unit rose 8% and marine content per unit rose 17%, the dollar value of Patrick parts in each vehicle climbing even as fewer vehicles were built. That is the structural offset to the cycle, and it is the figure that decides whether the company can hold the line through a soft first half.

Sentiment is constructive. The covering analysts carry a buy-leaning consensus, and several firms raised price targets into early 2026, citing earnings resilience through macro headwinds and growth in the RecPro and powersports lines. The company raised its dividend roughly 14% over the past year, with the most recent quarterly payment at $0.47 a share. The industry backdrop frames the timing debate: RV wholesale shipments are forecast to rise modestly in 2026 for a third straight year, with a stronger second half than first. The next two prints will test whether marine and powersports can keep carrying the load until RV volumes recover.

Peer Cohorts (Per Segment, With Filing Citations)

Manufacturing (reported)

• LCII (LCI INDUSTRIES)
• FY2025 10-K: …at December 31, 2025 and 2024. We have historically been able to obtain sales price increases to partially offset the majority of raw material cost increases. However, there can be no assurance future cost increases, if any, can be partially or fully passed on to customers, or that the timing of such sales price…
• FY2025 10-K: …is monitored regularly by management in an effort to achieve a high level of production efficiency and return on invested capital. We believe we have adequate capacity to meet projected demand. Capital expenditures for 2025 were $53 million, which included normal replacement expenditures along with approximately $17…
• THO (THOR INDUSTRIES, INC.)
• FY2025 10-K: …inventory on hand compared to historical norms. Such conditions could reoccur in the future and could have negative impacts on net sales and financial results due to not completing units on the production line and carrying higher volumes of incomplete units than historical norms. Raw materials and component parts are…
• FY2025 10-K: …the success of our product introductions. Further, we cannot be certain that our new product introductions will not reduce revenues from existing models and adversely affect our results of operations. If the products we introduce do not gain widespread market acceptance, or if our competitors' new products obtain…
• BC (Brunswick Corporation)
• FY2025 10-K: …in other global markets, which could affect our operations and financial results. Changes in domestic or foreign trade, manufacturing, or other policies may create negative sentiment about the U.S. among non-U.S. customers, employees, or prospective employees, which could adversely affect our business, sales, hiring,…
• FY2025 10-K: …estimated useful lives of 15 years and 10 years, respectively. Transaction costs associated with the acquisition were not material to the Company's consolidated results of operations. These 2023 acquisitions are not material to the Company's net sales, results of operations or total assets during any period…
• GNTX (GENTEX CORPORATION)
• FY2025 10-K: …systems and solutions; turn signal switches; puddle lamps; box lights; and harnesses (see Note 1 1 , "Acquisitions" ). For the majority of automotive products, transfer of control and revenue recognition occurs when the Company ships the product from the manufacturing facility to the customer. The Company generally…
• FY2025 10-K: …and is supplying a number of domestic and foreign vehicle models with its versions of auto-dimming mirrors. As such, Magna may present a formidable competitive threat. The Company also continues to sell automatic-dimming exterior mirror sub-assemblies to Magna Mirrors. There are also several Chinese domestic mirror…
• DAN (DAN)
• FY2025 10-K: …the customer or that have experienced a precipitous decline in program volumes. Note 19. Revenue from Contracts with Customers We generate revenue from selling production parts to original equipment manufacturers (OEMs) and service parts to OEMs and aftermarket customers. While we provide production and service parts…
• FY2025 10-K: …materials in the production of our products, including steel and products containing steel, stainless steel, forgings, castings, bearings, semiconductors, and magnets and related rare earth materials. Other commodity purchases include aluminum, brass, copper and plastics. These materials are typically available from…
• MOD (MODINE MANUFACTURING CO)
• FY2025 10-K: …the terms within the customer agreement, purchase order, or customer-owned tooling contract do not provide the Company with an enforceable right to payment for performance completed to date. As a result, the Performance Technologies segment recognizes revenue primarily at the time control is transferred to the…
• FY2025 10-K: …shutdowns and our third fiscal quarter is affected by customer holiday shutdowns. Working Capital We manufacture products for the majority of customers on an as-ordered basis, which makes large inventories of finished products unnecessary, with the exception of certain products in our Climate Solutions segment.…

Distribution (reported)

• LCII (LCI INDUSTRIES)
• FY2025 10-K: …and other claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters could materially affect operating results when resolved in future periods, management believes that, after final disposition, including anticipated insurance recoveries in certain…
• FY2025 10-K: …Program for the period between June 13, 2025 and August 1, 2025 to repurchase up to $ 100.0 million of common stock (excluding excise tax), subject to certain parameters. Under this Rule 10b5-1 trading plan, the Company purchased 1,057,667 shares at a weighted average price of $ 94.55 per share totaling $ 101.0…
• THO (THOR INDUSTRIES, INC.)
• FY2025 10-K: …4 409,000 Oregon - North American Towable Segment Owned 5 371,000 Other United States - Other Owned 3 611,000 Other United States - Other Leased 4 149,000 Other Subtotal 77 4,829,000 United States Subtotal 249 17,441,000 Europe: Germany - European Segment Owned 83 4,065,000 Germany - European Segment Leased 28…
• FY2025 10-K: 217:USD xbrli:shares tho:segment tho:dealership xbrli:pure iso4217:EUR tho:matter 0000730263 2024-08-01 2025-07-31 0000730263 2025-01-31 0000730263 2025-09-16 0000730263 2025-05-01 2025-07-31 0000730263 2025-07-31 0000730263 2024-07-31 0000730263 2023-08-01 2024-07-31 0000730263 2022-08-01 2023-07-31 0000730263…
• BC (Brunswick Corporation)
• FY2025 10-K: …distributors to sell most of our products. Maintaining a reliable network of dealers is essential to our success. We face competition from other manufacturers in attracting and retaining distributors and independent boat dealers. In addition, dealers or distributors could decide to reduce their level of inventory of…
• FY2025 10-K: A distribution businesses are leading distributors of Brunswick and third party marine parts and accessories throughout North America, Europe, and Asia-Pacific, offering same-day or next-day delivery service to a broad array of marine service facilities. 2 Table of Contents Navico Group Segment The Navico Group…
• PII (POLARIS INC.)
• FY2025 10-K: …under these agreements. Customer financing. We do not offer consumer financing directly to the end users of our products. Instead, we have agreements in place with third-party finance companies to provide financing services to those end consumers. We have no material contingent liabilities for residual value or…
• FY2025 10-K: …272,000 Fernley, Nevada Distribution center Off / On Owned 475,000 Wilmington, Ohio Distribution center Off / On Primarily Owned 658,000 Vermillion, South Dakota Distribution center Off / On Owned 610,000 Rigby, Idaho Distribution center and office facility Off / On Owned 108,000 Plymouth, Minnesota Office facility…
• GNTX (GENTEX CORPORATION)
• FY2025 10-K: …lease payments $ 9,144,314 Less imputed interest ( 415,779 ) Total $ 8,728,535 Earnings Per Share The Company has unvested share-based payment awards with a right to receive non-forfeitable dividends, which are considered participating securities under ASC 260, Earnings Per Share . The Company allocates earnings to…
• FY2025 10-K: …on the Nasdaq Composite Index (all U.S. companies) and the 22 Dow Jones U.S. Auto Parts Index (excluding tire and rubber makers). The graph assumes an investment of $100 on the last trading day of 2020 and reinvestment of dividends in all cases. In February 2022, the Board approved a continuing resolution to pay a…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.