Free Trial

Camping World Slashes its Dividend but Should You Cut the Stock?

Camping World stock Dividend

Key Points

  • Camping World is down over 13% the day after the company slashed its dividend by 80%.  
  • The dividend cut was authorized to help fund the company’s continuing purchases of RV dealerships. 
  • Revenue and earnings continue to decline on a year-over-year basis. 
  • With high short interest, long-term investors should wait for the dust to settle before considering CWH stock. 
  • MarketBeat previews top five stocks to own in November.

In early trading, the day after the company reported disappointing second-quarter earnings, Camping World Holdings, Inc. NYSE: CWH stock was down over 9%. The company missed on both the top and bottom lines, but the real catalyst is the company’s announcement that it slashed its quarterly dividend by 80%.  

The company will now issue a dividend of 12.5 cents per share down from 62.5 cents. The forward yield is 1.6%. This will be difficult news for income investors to swallow as the company’s dividend was a key element in the overall thesis for holding CWH stock.  

However, as traders sell the news, a little context could go a long way towards helping you make a long-term decision on CWH stock. Specifically, the company’s board of directors made the decision to cut the dividend because of the company’s ongoing campaign to purchase RV dealerships throughout the United States.  

According to Camping World chief executive officer (CEO) Marcus Lemonis, the company has “opened, acquired, or signed letters of intent on 30 dealership locations year-to-date.” The company also says the opportunity for additional acquisitions is “unprecedented.”  

There is a risk to this strategy as RV manufacturers such as Winnebago Industries, Inc. NYSE: WGO point to lower RV sales. However, if the company is correct in its forecast for revenue growth in 2024 and beyond, this may be a wise use of capital.  

What Did Earnings Say?  

The headline numbers in the earnings report showed the company generating 73 cents in earnings per share (EPS) on revenue of $1.90 billion. Both numbers were lower than analysts’ estimates for EPS of 75 cents (a miss of 3.76%) on revenue of $1.97 billion (a miss of 3.58%). 

Neither miss seems to justify the 13% drop in the company’s stock. The downward momentum is likely due, in part, to the high degree of short interest in CWH stock. 

However, it’s difficult to look past the earnings number which reflects a 62% drop from the $2.01 EPS it recorded in the same quarter in 2022. The company cited a pretax drop in new vehicle gross profit as a reason for the disparity. Gross profit was down 20.3% and total gross margin was down 30%.  

However, the decrease in gross margin was offset, in part, by increased sales of higher-margin used RVs. This highlights the company’s strategic role as a middle-man in the RV sector.  

Don’t Try to Catch a Falling Knife 

A term every investor should understand is “falling knife.” This describes an event where a stock quickly drops in price. When this happens, investors should wait for the stock to bottom out before buying back in.  

Down over 13% the day after earnings, Camping World stock is having a falling knife event. And investors also need to consider that CWH stock has a heavy short interest of over 17%. Combined with the stock having climbed over 31% in the three months leading into the earnings report, the momentum for the stock is bearish. 

Trying to time the exact bottom is always challenging. A look at the CWH stock chart shows that it has already fallen below a level of support at $27.41. The next level to watch is $26.14. If the stock slices below that, the stock could begin to move below $22.  

Camping world stock chart

Investors should also consider analyst sentiment. The Camping World analyst ratings on MarketBeat show that the company received one upgrade and one downgrade in the month leading up to earnings. Value investors will want to see if analysts become more bullish on CWH stock which could be a sign the sell-off is overdone.  

Should You Invest $1,000 in Camping World Right Now?

Before you consider Camping World, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Camping World wasn't on the list.

While Camping World currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

7 Stocks to Ride The A.I. Megaboom Cover


We are about to experience the greatest A.I. boom in stock market history...

Thanks to a pivotal economic catalyst, specific tech stocks will skyrocket just like they did during the "dot com" boom in the 1990s.

That’s why, we’ve hand-selected 7 tiny tech disruptor stocks positioned to surge.

  1. The first pick is a tiny under-the-radar A.I. stock that's trading for just $3.00. This company already has 98 registered patents for cutting-edge voice and sound recognition technology... And has lined up major partnerships with some of the biggest names in the auto, tech, and music industry... plus many more.
  2. The second pick presents an affordable avenue to bolster EVs and AI development…. Analysts are calling this stock a “buy” right now and predict a high price target of $19.20, substantially more than its current $6 trading price.
  3. Our final and favorite pick is generating a brand-new kind of AI. It's believed this tech will be bigger than the current well-known leader in this industry… Analysts predict this innovative tech is gearing up to create a tidal wave of new wealth, fueling a $15.7 TRILLION market boom.

Right now, we’re staring down the barrel of a true once-in-a-lifetime moment. As an investment opportunity, this kind of breakthrough doesn't come along every day.

And the window to get in on the ground-floor — maximizing profit potential from this expected market surge — is closing quickly...

Simply enter your email below to get the names and tickers of the 7 small stocks with potential to make investors very, very happy.

Get This Free Report
Chris Markoch
About The Editor

Chris Markoch

Editor & Contributing Author

Contributing Author

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Camping World (CWH)
4.0081 of 5 stars
$15.05-0.7%3.32%-75.26Moderate Buy$21.67
Winnebago Industries (WGO)
4.0885 of 5 stars
$29.97-0.1%4.67%-50.79Hold$40.78
Compare These Stocks  Add These Stocks to My Watchlist