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S&P 500   3,852.36
DOW   32,920.46
QQQ   303.59
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DOW   32,920.46
QQQ   303.59
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Pitch a Tent in Camping World Stock

Key Points

  • Shares trade at just 5.3X forward earnings and pays nearly a 9% annual dividend yield
  • Investors should brace for an earnings miss and be ready to scoop up shares at attractive pullback levels
  • Rising interest rates, recession risk, and falling consumer discretionary spending are major headwinds
  • Revenues growth fell to just 5.2% from 25.4% in year-ago period
  • Camping World reported its highest revenue quarter and second strongest earnings quarter ending  June 2022
  • 5 stocks we like better than Camping World
Pitch a Tent in Camping World StockCamping products and recreational vehicle (RV) dealer Camping World (NYSE: CWH) has been a direct  benefactor of the pandemic as consumers discovered or rediscovered outdoor leisure activities. The lifting of COVID restrictions and spread of vaccinations haven’t stopped the growth at Camping World. Investors ponder if there is a new normal emerging for the industry. From a valuation standpoint, shares are trading very cheap at just 5.3X forward earnings with a lofty 8.75% annual dividend, assuming forward estimates aren’t revised down. It actually trades at a cheaper valuation than RV makers Winnebago (NYSE: WGO) trading a low 4.1X forward earnings with a stingy 1.9% annual dividend yield or Thor Industries (NYSE: THO) trading at 9.2X forward earnings and a 2.3% annual dividend yield.

Bracing for a Recession

The U.S. Federal Reserve has raised interest rates 3% in the past six months in an attempt to curb rampant inflation. However, the results have been slow to materialize as the September headline CPI was 8.2% missing 8.1% analyst estimates but still showing progress from the June highs of 9.1%. The (-36%) decline in August RV deliveries for the industry may foreshadow a decline in Camping World’s RV sales. Normalization and the potential for a slowdown in sales to be reported in its next earnings report should give investors pause about rushing into the stock. The RV business has been going gangbusters since the pandemic lockdowns and it appears to be very sticky as underlying consumer lifestyle changes continues to drive demand. However, rising interest rates and waning consumer discretionary spending have likely taken a toll on demand and investors should brace for potential shortfall. Supply chain restraints have been easing as evidenced by the more than doubling of vehicle inventories since same period last year.


Minimal and Mobile Lifestyle Trend Driver

The pandemic amplified the trend of minimalistic and mobile living and experiential travel and outdoor recreation. There are numerous new content providers on YouTube (NASDAQ: GOOGL) expounding the joys of van life and RV-ing as a lifestyle adjustment transcending beyond just for vacation, but applicable as a mobile residence and office. There’s the possibility that a recession could drive more consumers towards minimalist and mobile living especially as fuel costs are continuing to fall.

Is Normalization Coming in Q3 2022?

On Aug. 2, 2022, Camping World released its fiscal second-quarter 2022 results for the quarter ending June 2022. The Company reported a profit of $2.16 per share beating analyst estimates for $1.79 per share by $0.37 per share. Revenues rose 5.2% year-over-year (YoY) to $2.17 billion beating $2.03 billion consensus analyst estimates. New and used vehicle inventories rose to $1.7 billion from $782.5 billion a year ago due to the easing of supply chain restraints. The Company continues to pay its $0.625 per share quarterly dividend or $2.50 per share annualized dividend.

The Prophet Speaks

Camping World celebrity CEO Marcus Lemonis commented, “We are pleased with the sale of almost 39,000 new and used RVs which contributed to record revenues for the second quarter. We believe our team has both the focus and experience to navigate our business through changes in market conditions as evidenced by our solid financial results.”

Pitch a Tent in Camping World Stock

Here’s What the Charts Say

Using the rifle charts on the weekly and daily time frames provides a broader view of the landscape for CWH stock. The weekly rifle chart formed breakdown when shares fell under the $27.17 Fibonacci (fib) level to bottom out near the $23.03 fib before staging a rally. The weekly 5-period moving average (MA) resistance is still falling at $25.96 followed by the rising 15-period MA at $27.68. The weekly 200-period MA support is slowly rising at $25.23. The weekly 50-period MA resistance is falling at $30.81. The weekly market structure low (MSL) buy trigger is still holding up at $24.35. The weekly stochastic is falling through the 40-band and weekly lower Bollinger Bands (BBs) sit at $18.74. The daily rifle chart has been in an uptrend but losing steam as the daily 5-period MA support gets tested at $27.39 followed by a rising 15-period MA at $26.14. The daily stochastic ripped up through the 80-band. The daily 50-period MA at $28.83 nearly overlaps with the daily 200-period MA resistance at $28.99. The daily upper BBs sit at $30.27 and daily lower BBs sit at $22.14. With the potential for a weak earnings report, it’s best to consider waiting out the earnings reaction for sell-off to attractive pullback levels at the $25.39, $23.98 fib, $23.03 fib, $20.83 fib, $19.55 fib, and the $17.70 fib level.  

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

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Camping World (CWH)
1.9388 of 5 stars
$26.48-0.2%9.44%5.83Moderate Buy$32.83
Winnebago Industries (WGO)
1.3986 of 5 stars
$66.70-2.6%1.62%6.29Moderate Buy$67.00
THOR Industries (THO)
2.0598 of 5 stars
$98.75-3.6%1.82%5.26Hold$79.50
Alphabet (GOOGL)
3.391 of 5 stars
$102.90-1.8%N/A22.61Moderate Buy$132.50
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Jea Yu

About Jea Yu

Contributing Author: Trading Strategies

With over 20 years of active participation and analysis of the US equities, options and futures markets, Mr. Yu brings fresh insights into the workings of the financial markets. He has published four books by esteemed publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. His brainchild, the Underground Trader, was voted Forbes Best of the Web for four consecutive years under the active trader category. He has been a featured speaker all over the country at various expos and seminars who enjoys a standing-room-only reception in the largest convention halls from New York to Las Vegas. He has been quoted and featured in USA Today, Wall Street Journal, Traders Magazine and the Financial Times and various trade publications like Stocks & Commodities, Active Trader and Online Investor. Mr. Yu has a B.A. in Liberal Arts and minor in Business Administration from the University of Maryland.
Contact Jea Yu via email at JeaYu21@gmail.com.

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