S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
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The single greatest medical breakthrough of all time? (Ad)
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
Moldova signs new energy deal that could ease blackout risk
The single greatest medical breakthrough of all time? (Ad)
No OPEC+ oil shakeup as Russian price cap stirs uncertainty
OPEC+ oil producers face uncertainty over Russian sanctions
The single greatest medical breakthrough of all time? (Ad)
OPEC keeps oil targets amid uncertainty on Russian sanctions
FDA change ushers in cheaper, easier-to-get hearing aids
S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
Get Rid of Your Siri Remote Once and for All This Year
The single greatest medical breakthrough of all time? (Ad)
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
Moldova signs new energy deal that could ease blackout risk
The single greatest medical breakthrough of all time? (Ad)
No OPEC+ oil shakeup as Russian price cap stirs uncertainty
OPEC+ oil producers face uncertainty over Russian sanctions
The single greatest medical breakthrough of all time? (Ad)
OPEC keeps oil targets amid uncertainty on Russian sanctions
FDA change ushers in cheaper, easier-to-get hearing aids
S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
Get Rid of Your Siri Remote Once and for All This Year
The single greatest medical breakthrough of all time? (Ad)
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
Moldova signs new energy deal that could ease blackout risk
The single greatest medical breakthrough of all time? (Ad)
No OPEC+ oil shakeup as Russian price cap stirs uncertainty
OPEC+ oil producers face uncertainty over Russian sanctions
The single greatest medical breakthrough of all time? (Ad)
OPEC keeps oil targets amid uncertainty on Russian sanctions
FDA change ushers in cheaper, easier-to-get hearing aids
S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
Get Rid of Your Siri Remote Once and for All This Year
The single greatest medical breakthrough of all time? (Ad)
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
Moldova signs new energy deal that could ease blackout risk
The single greatest medical breakthrough of all time? (Ad)
No OPEC+ oil shakeup as Russian price cap stirs uncertainty
OPEC+ oil producers face uncertainty over Russian sanctions
The single greatest medical breakthrough of all time? (Ad)
OPEC keeps oil targets amid uncertainty on Russian sanctions
FDA change ushers in cheaper, easier-to-get hearing aids

REV Group Has A Deep Moat In The World Of EVs 

REV Group Has A Deep Moat In The World Of EVs 

REV Group (NYSE: REVG) is a niche EV play without the flash of Lucid Motors (NASDAQ: LCID), Workhorse Group (NASDAQ: WKHS), or Nikola (NASDAQ: NKLA) but it has something they don’t. A deep moat. While there are other manufacturers making EV ambulances, fire trucks, busses, and RVs they are few and far between and, better, they aren’t in production yet and may not ever make it. When it comes to luxury, final mile, and long-haul delivery all you have to do is look at the top-tier names like Tesla (NASDAQ: TSLA), Ford (NYSE: F), and GM (NYSE: GM) to find the toughest competition on the planet. The takeaway is that REV Group has a deep moat and more. The company is not a pure play on EVs but a manufacturer of ICE, BEV, hybrid, and hydrogen fuel-celled powered vehicles as well. This gives it a deep moat as well as deep diversification. 

REV Group Constrained By Supply Chain 

REV Group had a good quarter and one that could have been better if not for supply chain constraints that limited production and deliveries. The company reported $594.8 million for a gain of 0.3% over last year as it is and beat the consensus by a slim margin as well. The gains were driven primarily by strength in the RV segment aided by pricing actions across the portfolio. The Fire & Emergency segment posted a YOY decline but this is due to parts supply and labor availability and not the underlying business. The Commercial segment posted a small 0.3% decline as well which was offset by a 19.6% increase in the RV segment.


Moving down to the margin, the company posted a decline in margin versus last year but in line with the Marketbeat.com consensus figure and there was a sequential improvement as well. This left the adjusted EPS at $0.24 and $0.02 better than expected and margin recovery is expected to continue into the end of the year. The only bad news is the guidance and even that is tempered by the details. The company lowered its revenue outlook for the year but only at the top and the new range still brackets the consensus. The guidance was held firm at the low end because of the record backlogs and supply visibility so there is a chance for outperformance should supply chain issues ease over the next couple of months. 

“We delivered sequential margin improvement in the third quarter with demand for our vehicles remaining strong. We continue to take actions to offset inflationary pressures and remain focused on operational disciplines to drive margin expansion across our businesses,” said REV Group Inc. President and CEO Rod Rushing. “The mid-point of updated guidance anticipates continued margin momentum on revenue that remains constrained by the supply chain.”

REV Group Returns Capital To Shareholders 

Another of REV Group’s many attractive qualities is its established nature and, more to the point, profitability. The company turns a profit and has a healthy balance sheet that supports not only a dividend but share repurchases as well. The stock yields about 1.80% with shares trading near $11.30 and it is a safe payout. The company suspended payment during the pandemic like so many others but brought it back quickly and at the pre-pandemic level which is about 21% of the earnings. The company has no history of dividend increases but it looks like it would be possible given the metrics. 

The Technical Outlook: REV Group Bounces From Institutional Support 

REV Group hit a bottom with the Q1 results and the Q2 results have the stock in reversal. The price action popped more than 5% and is showing some signs of near-term resistance but the weekly charts are very bullish. The stock is not only showing a new, higher level of support than where it first bounced but the bounce is supported by the indicators and the results as well. Assuming the market follows through on this move, 98% institutional ownership and 6% short interest should help drive the price up to the $14 level before the end of the year. 

REV Group Has A Deep Moat In The World Of EVs 

Should you invest $1,000 in REV Group right now?

Before you consider REV Group, 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 REV Group wasn't on the list.

While REV Group currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
REV Group (REVG)
1.6965 of 5 stars
$13.94-0.9%1.43%126.74Hold$11.42
Lucid Group (LCID)
2.0701 of 5 stars
10.15+3.3%N/A-7.15Hold24.71
Workhorse Group (WKHS)
1.9017 of 5 stars
$2.42+4.3%N/A-1.48Moderate Buy$4.83
Nikola (NKLA)
1.6483 of 5 stars
$2.85+9.6%N/A-1.67Hold$9.25
Tesla (TSLA)
2.9489 of 5 stars
$194.86+0.1%N/A60.20Hold$278.43
General Motors (GM)
2.7792 of 5 stars
$39.90-1.3%0.90%6.76Moderate Buy$51.74
Ford Motor (F)
2.2462 of 5 stars
$13.86-1.6%4.33%6.30Hold$18.13
REV Group (REVG)
1.6965 of 5 stars
$13.94-0.9%1.43%126.74Hold$11.42
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

Contributing Author: Technical and Fundamental Analysis

Thomas got his start with the markets while working as a Chef. In 2005 a chance invitation to attend the seminar “How To Buy And Sell Your Own Stocks” altered his worldview. Soon trading and stocks consumed his every waking moment to the point of excluding all else. Thomas now enjoys a much different lifestyle engaged in his true passion, uncovering great investments.
Contact Thomas Hughes via email at tmhughes.writeon@gmail.com.