Camping World Ascends New Peak With Higher Highs In Sight

Wednesday, May 5, 2021 | Thomas Hughes
Camping World Ascends New Peak With Higher Highs In Sight

A Perfect Storm Lifts Camping World To New Highs 

As strong as the trends in the RV industry are, even we’re surprised by Camping World’s (NYSE: CWH) Q1 results. The industry was recently forecast to grow at a 24% rate over last year and set a new high that, quite frankly, is still underestimating the market. Demand for RV’s and RV equipment is at a record high and faced with the lowest inventory we’ve seen in years. The pace of growth may slow over the coming years but growth is going to be strong regardless of the comp. 

"There’s really continued customer demand. Inventory on dealer lots continues to be at historic lows because of the demand by consumers. Based on those two factors alone, it should be a really strong year for the industry," notes RVIA.

Camping World Blows Past The Consensus, Guides Higher 

Unlike some others who’ve reported this week, Camping World shareholders were rewarded for the company’s strong results. The primary reasons are 1) revenue is up 51.5% from last year on strong demand and 2) the revenue of $1.56 billion beat the consensus mark by 1900 basis points. The strength was driven by both higher sales and higher realized prices in new and used vehicles that helped drive substantial improvement to margins and earnings. 

The company’s unit growth of 38.7% was compounded by a strong 35.5% increase in profit per vehicle to aid a 395 basis point improvement in gross margin, all of which we like. The company is exhibiting earrings leverage that is working its way down to the bottom line as well. The net income margin improved to 9.5% from last year’s -1.4% loss while the adjusted EBITDA margin expanded nearly 900 basis points to 12.2%. As for earnings, Camping World reported $1.40 in both GAAP and adjusted earnings to beat the consensus by $0.71 and $0.66 respectively. 

Execs at Camping World didn’t offer any formal guidance for revenue but did offer some outlook on earnings. The company is expecting its EBITDA earnings in a range of $770 to $810 million versus the previously guided $640 to $690 million. The new guidance assumes a sequential acceleration of earnings if not revenue that is supported by the industry data. If our estimations are correct, Camping World will be raising its guidance again later this year. 

Camping World Is A Deep-Value Cash Generating Machine 

Camping World is trading at a ridiculously low 9X earnings considering the strength of the growth, stickiness of the trends, the move toward EV RVs, and the health of the company. Camping World is sitting on a strong balance sheet and pays a very safe dividend for what you have to pay. The yield is fairly low at 0.82% but it is incredibly safe at only 6% of earnings and expected to grow. In addition, the company has been paying a regular special dividend that more than double the yield and isn’t expected to end. 

The Technical Outlook: Short-Covering Takes Camping World To Resistance 

Shares of Camping World spiked in the wake of the Q1 report but the move may be as much about short-covering as it is about the results. The short interest was running above 16% as of the last report and is likely adding fuel to this fire. Regardless, the price action is testing resistance at the previous all-time high and looking relatively strong. If the market can break above this level we see this stock moving up into the $60 to $70 range.

Camping World Ascends New Peak With Higher Highs In Sight

Featured Article: What are Institutional Investors?

7 Internet of Things Stocks That Are a Perfect Fit to Our Connected Future

When you say the Internet of Things (IoT) you may get different responses. I like to think of it broadly as being about connection. It’s about devices that can connect with each other, and with the internet. And this provides users with the solutions that are making our lives more convenient.

The most basic, and ubiquitous, example of an IoT device is the smartphone that many of us have with us at all times. But think about what that has led to. Home assistants, security cameras, fitness apps, and so much more are all enabled by the internet of things.

IoT took on even more importance in the pandemic as businesses had to find a way to ensure the security and viability of their networks even as their employees were scattered remotely. This created demand for edge and cloud computing solutions that are also facilitated by the internet of things.

And yes, this is just the start. The need for more and more data is powering demand for IoT solution in areas such as autonomous vehicles.

But the good news is that this is an area that is still very much in its growth phase. And that means there is no lack of companies that you can find to trade in this sector. To help you get started, we’ve put together this special presentation that highlights seven such companies and the reasons why we believe they merit adding to your portfolio.

View the "7 Internet of Things Stocks That Are a Perfect Fit to Our Connected Future".

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Camping World (CWH)2.6$37.90+3.4%2.64%8.03Buy$52.22
Compare These Stocks  Add These Stocks to My Watchlist 

MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.