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Camping World Is Not Dead

Dec. 07, 2018 11:18 PM ETCamping World Holdings, Inc. (CWH)23 Comments


  • CWH shares have been hammered in 2018.
  • The company's results do not support this.
  • I think margin pressures are transitory and that shares will move much higher in the coming years.

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Shares have been obliterated this year

Camping World Holdings (NYSE:CWH) has been decimated in 2018. Shares began the year in the mid-$40s but in the 11+ months since, have fallen to just $16 and some change as of this writing. Investors are worried about a variety of issues including the impact of tariffs, the company’s own growth outlook and a general slowdown in the economy. I’ve been bullish on Camping World as it has fallen into the teens after I thought it was very expensive in the $40s, but so far, my bullishness hasn’t been rewarded. However, the stock is priced now as though the company will materially miss earnings projections in the years to come, a condition which has produces a low-risk, high-reward situation for the bulls. As such, I’m still bullish on Camping World.

Revenue continues to move higher

The thing is that while tariffs and a slowdown in the economy are legitimate risks to Camping World in theory, the company’s recent results simply don’t support the bear case. Revenue in the third quarter was up more than 6% as its three reporting segments – which is a new reporting structure from the old structure of two segments – produced revenue gains.

Consumer Services & Plans saw revenue rise 12.7% as the segment added 8.5% to its customer total, which is now up to 3 million. Dealership revenue, which is by far the largest segment, was up fractionally during Q3. Total units sold increased 2.3% as both new and used unit volume rose in excess of 2%. However, consumers selected smaller and cheaper new units in Q3, sending average selling price down by over 4%, which kept a lid on revenue growth. Finally, Retail revenue increased 52.6% thanks to the addition of Gander Outdoors stores, which the company has been adding throughout the year. However, comparable sales in the Retail segment fell off a cliff in

This article was written by

Josh Arnold profile picture
Leader of Timely Trader
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I've been covering financial markets for ten years, using a combination of technical and fundamental analysis to identify potential winners (and losers) early, particularly when it comes to growth stocks.

Analyst’s Disclosure: I am/we are long CWH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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