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Here's Why Investors Should Retain Camping World (CWH) Stock
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Camping World Holdings, Inc. (CWH - Free Report) is likely to benefit from solid same-store new vehicle sales growth, acquisitions of new and used RV dealerships and new store openings. However, high costs and price fluctuations remain headwinds.
Let us discuss the factors that highlight why investors should retain the stock now.
Growth Catalysts
Solid same-store new vehicle sales growth continues to bolster the company's performance. The company has achieved double-digit growth in same-store sales and market share in the first quarter of 2024, highlighting the demand for lower-priced units and affordability as key factors.
During the quarter, same-store new vehicle unit sales increased by 15.5% year over year, driven by strategicinventory management. This supports the company's view that lower-priced RVs are highly responsive to market dynamics. CWH also witnessed double-digit performance in new vehicle sales on a same-store basis in April. Its strategy remains focused on meeting strong demand while maintaining affordability.
The company's efforts to lower invoice pricing and enhance consumer affordability resulted in meaningful growth in new unit sales, outpacing broader RV industry trends. It drove significant market share gains in January and February. During the quarter, CWH reported $656.1 million in new vehicle revenues, reflecting a 1.4% increase year over year. New vehicle unit sales reached 16,882 units, up 21.3% year over year.
Camping World primarily focuses on strategic investments in acquisitions to increase its footprint. It aims at maximizing the returns of working capital to continue its supercharged acquisition plan, which directly sparks its growth prospects. During the quarter, CWH's RV and Outdoor Retail segment acquired assets from various RV dealerships at nine locations for approximately $67.7 million.
As of Mar 31, 2024, the company operated 215 store locations, reflecting a 10.3% increase year over year, with a net addition of 13 store locations during the first quarter. It plans to open two more stores internally by 2024-end and remains focused on opportunistic acquisitions to reach a goal of 320 stores by the end of 2028.
In 2024, the company plans to expand Good Sam and enhance its used RV business as part of its growth strategy. It aims to increase market share in new RVs and add profitable acquisitions to its dealer network.
Image Source: Zacks Investment Research
Concerns
Shares of this recreational vehicle dealer have declined 28.3% in the past six months against the Zacks Leisure and Recreation Services industry’s 7.7% growth. Dismal used vehicle revenues and increased operating expenses caused the downside.
During first-quarter 2024, the company's selling, general, and administrative expenses increased 1.6% year-over-year to $371.5 million. This rise was primarily due to higher advertising expenses and professional fees.
The company faces continued pressure on the used vehicle side, affecting margins and demand. It reported $1.4 billion in revenues in the first quarter, down 8% year over year, primarily due to reduced used unit volume. Used vehicle revenues totaled $337.7 million, down 24.1% year over year. Used vehicle unit sales fell 14% year over year to 10,694 units.
Zacks Rank & Key Picks
Camping World currently carries a Zacks Rank #3 (Hold).
The consensus estimate for AGS’s 2024 sales and earnings per share (EPS) suggests growth of 7.7% and 5,200%, respectively, from the year-ago levels.
Adtalem Global Education Inc. (ATGE - Free Report) currently carries a Zacks Rank of 2 (Buy). ATGE has a trailing four-quarter earnings surprise of 18.8%, on average. The stock has surged 85.9% in the past year.
The Zacks Consensus Estimate for ATGE’s fiscal 2025 sales and EPS indicates an increase of 8.3% and 16.4%, respectively, from year-ago levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently carries a Zacks Rank of 2. RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 55.8% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.9% and 64%, respectively, from the year-ago levels.
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Here's Why Investors Should Retain Camping World (CWH) Stock
Camping World Holdings, Inc. (CWH - Free Report) is likely to benefit from solid same-store new vehicle sales growth, acquisitions of new and used RV dealerships and new store openings. However, high costs and price fluctuations remain headwinds.
Let us discuss the factors that highlight why investors should retain the stock now.
Growth Catalysts
Solid same-store new vehicle sales growth continues to bolster the company's performance. The company has achieved double-digit growth in same-store sales and market share in the first quarter of 2024, highlighting the demand for lower-priced units and affordability as key factors.
During the quarter, same-store new vehicle unit sales increased by 15.5% year over year, driven by strategicinventory management. This supports the company's view that lower-priced RVs are highly responsive to market dynamics. CWH also witnessed double-digit performance in new vehicle sales on a same-store basis in April. Its strategy remains focused on meeting strong demand while maintaining affordability.
The company's efforts to lower invoice pricing and enhance consumer affordability resulted in meaningful growth in new unit sales, outpacing broader RV industry trends. It drove significant market share gains in January and February. During the quarter, CWH reported $656.1 million in new vehicle revenues, reflecting a 1.4% increase year over year. New vehicle unit sales reached 16,882 units, up 21.3% year over year.
Camping World primarily focuses on strategic investments in acquisitions to increase its footprint. It aims at maximizing the returns of working capital to continue its supercharged acquisition plan, which directly sparks its growth prospects. During the quarter, CWH's RV and Outdoor Retail segment acquired assets from various RV dealerships at nine locations for approximately $67.7 million.
As of Mar 31, 2024, the company operated 215 store locations, reflecting a 10.3% increase year over year, with a net addition of 13 store locations during the first quarter. It plans to open two more stores internally by 2024-end and remains focused on opportunistic acquisitions to reach a goal of 320 stores by the end of 2028.
In 2024, the company plans to expand Good Sam and enhance its used RV business as part of its growth strategy. It aims to increase market share in new RVs and add profitable acquisitions to its dealer network.
Image Source: Zacks Investment Research
Concerns
Shares of this recreational vehicle dealer have declined 28.3% in the past six months against the Zacks Leisure and Recreation Services industry’s 7.7% growth. Dismal used vehicle revenues and increased operating expenses caused the downside.
During first-quarter 2024, the company's selling, general, and administrative expenses increased 1.6% year-over-year to $371.5 million. This rise was primarily due to higher advertising expenses and professional fees.
The company faces continued pressure on the used vehicle side, affecting margins and demand. It reported $1.4 billion in revenues in the first quarter, down 8% year over year, primarily due to reduced used unit volume. Used vehicle revenues totaled $337.7 million, down 24.1% year over year. Used vehicle unit sales fell 14% year over year to 10,694 units.
Zacks Rank & Key Picks
Camping World currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are:
PlayAGS, Inc. (AGS - Free Report) sports a Zacks Rank of 1 (Strong Buy). AGS has a trailing four-quarter earnings surprise of 33.3%, on average. The stock has appreciated 96.2% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The consensus estimate for AGS’s 2024 sales and earnings per share (EPS) suggests growth of 7.7% and 5,200%, respectively, from the year-ago levels.
Adtalem Global Education Inc. (ATGE - Free Report) currently carries a Zacks Rank of 2 (Buy). ATGE has a trailing four-quarter earnings surprise of 18.8%, on average. The stock has surged 85.9% in the past year.
The Zacks Consensus Estimate for ATGE’s fiscal 2025 sales and EPS indicates an increase of 8.3% and 16.4%, respectively, from year-ago levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently carries a Zacks Rank of 2. RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 55.8% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.9% and 64%, respectively, from the year-ago levels.