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Why Is Winnebago (WGO) Up 16.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Winnebago Industries (WGO - Free Report) . Shares have added about 16.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Winnebago due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Winnebago Delivers Higher Y/Y Earnings & Revenues in Q2
Winnebago reported earnings of 67 cents per share in second-quarter fiscal 2020, missing the Zacks Consensus Estimate of 70 cents. High SG&A costs and lower-than-expected deliveries of motorhomes and fifth-wheel towable can be attributed to the underperformance. Nonetheless, the bottom line compared favorably with 61 cents a share recorded in the year-ago quarter. Impressive lineup of high-quality innovative products and the strategic acquisitions of Newmar and Grand Design enabled the company to deliver improved year-over-year results.
Revenues in the reported quarter increased 44.8% year over year to $626.8 million. The revenue figure also beat the Zacks Consensus Estimate of $610 million. While the company recorded higher year-over-year operating expenses, operating income increased to $29.6 million from the year-ago figure of $28.9 million due to the uptick in revenues.
Segment Results
Revenues in the Motorhome segment were up 97.7% year over year to $325.5 million, mainly aided by strength in the Class B line-up and the addition of Newmar revenues in the quarter. Adjusted EBITDA skyrocketed 243% year over year to $15 million.
Revenues in the Towable segment improved 13% year over year to $283.5 million. This upside was driven by robust unit growth in the Grand Design RV product line. Adjusted EBITDA was $34.7 million, up 3.3% from the prior-year quarter.
Financials & Dividend
Winnebago had cash and cash equivalents of $122.9 million as of Feb 29, 2020 compared with $37.4 million on Aug 31, 2019. Long-term debt totaled $451.1 million, representing a debt-to-capital ratio of 36%
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -107.21% due to these changes.
VGM Scores
At this time, Winnebago has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Winnebago has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Winnebago (WGO) Up 16.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Winnebago Industries (WGO - Free Report) . Shares have added about 16.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Winnebago due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Winnebago Delivers Higher Y/Y Earnings & Revenues in Q2
Winnebago reported earnings of 67 cents per share in second-quarter fiscal 2020, missing the Zacks Consensus Estimate of 70 cents. High SG&A costs and lower-than-expected deliveries of motorhomes and fifth-wheel towable can be attributed to the underperformance. Nonetheless, the bottom line compared favorably with 61 cents a share recorded in the year-ago quarter. Impressive lineup of high-quality innovative products and the strategic acquisitions of Newmar and Grand Design enabled the company to deliver improved year-over-year results.
Revenues in the reported quarter increased 44.8% year over year to $626.8 million. The revenue figure also beat the Zacks Consensus Estimate of $610 million. While the company recorded higher year-over-year operating expenses, operating income increased to $29.6 million from the year-ago figure of $28.9 million due to the uptick in revenues.
Segment Results
Revenues in the Motorhome segment were up 97.7% year over year to $325.5 million, mainly aided by strength in the Class B line-up and the addition of Newmar revenues in the quarter. Adjusted EBITDA skyrocketed 243% year over year to $15 million.
Revenues in the Towable segment improved 13% year over year to $283.5 million. This upside was driven by robust unit growth in the Grand Design RV product line. Adjusted EBITDA was $34.7 million, up 3.3% from the prior-year quarter.
Financials & Dividend
Winnebago had cash and cash equivalents of $122.9 million as of Feb 29, 2020 compared with $37.4 million on Aug 31, 2019. Long-term debt totaled $451.1 million, representing a debt-to-capital ratio of 36%
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -107.21% due to these changes.
VGM Scores
At this time, Winnebago has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Winnebago has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.