Entering text into the input field will update the search result below

Camping World: Another Blow-Out Quarter, Investors Still Disappointed

Mar. 01, 2021 9:11 AM ETCamping World Holdings, Inc. (CWH)31 Comments
Equanimity Investing profile picture
Equanimity Investing


  • Camping World beat expectations handsomely in Q4.
  • Investors lacked enthusiasm likely due to the still leveraged cap structure.
  • CWH management continues to execute well, but reduced financial leverage could result in a favorable equity multiple rerating.
  • Nonetheless, shares remain attractive at current levels.

Camping World (NYSE:CWH) smashed earnings expectations by delivering Q4 non-GAAP EPS of $0.48 and GAAP EPS of $0.34, well beyond what Wall Street was forecasting. The beat was primarily driven by continued top-line growth running red hot at 17.5% to $1.1 billion, and even greater improvement in gross margins and sustained tight cost controls. While JPMorgan finally switched its rating from neutral to overweight, giving credit where it is due, investors still remained unimpressed by the quarter as shares fell by 15%.

Strong Outlook

CEO Marcus Lemonis provided a healthy outlook regarding the supply demand picture for the industry, as supply constraints continue to limit available RV inventory while demand remains persistently strong, even as pandemic lockdowns are subsiding. Fortunately, that only supports the thesis that Mr. Lemonis outlined in early 2020 that he believes demand will remain strong even after the pandemic due to the structural shift in society of people wanting to balance their lifestyle with more outdoor activities, i.e., secular growth. However, analysts continue to believe that the industry is cyclical, and while that is true, I think the path of RV volumes and pricing will reflect a trend that's akin to the well-known long-term economic cycle, i.e., a staircase that reflects higher highs and higher lows over time, or at least that's what it will be for an industry leader like CWH.

While this is nothing new, Camping World has restructured its business to be inherently more profitable, has strategically made private-market bolt-on acquisitions, and continues to push its Good Sam subscription membership, among many other ancillary service offerings, that continues to be enhanced that will continue to drive long-term revenue and earnings growth over the long term, i.e., 5-10 years. Importantly, management is NOT trying to manage analyst or investor expectations quarter to quarter, but it appears to be gearing everything towards longevity and sustainability

This article was written by

Equanimity Investing profile picture
Equanimity Research helps you focus on protecting your principal and thinking long-term with your investments. I'm long treasuries, select high-quality companies, and will never use margin. As a generalist, I cover multiple sectors with a dividend and non-dividend long-only stock strategy over a 5-10+ year investment horizon. I also cover macroeconomics regarding monetary policy and excessive debt levels globally.All articles/blogs are for informational and entertainment purposes only. Under no circumstances should any of these articles/blogs or any published information be interpreted as investment advice, or as an offer to buy/sell any financial security. Perform your own due diligence. I welcome comments and corrections of all kinds.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in CWH over the next 72 hours. 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.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.