The recreational vehicles (RVs) market is growing as people return to road trips and camping as a getaway from the pandemic and bustling city life. Moreover, the rising commercial usage of RVs and the proliferation of peer-to-peer rental services among millennials are expected to foster this market’s growth. The RV market is anticipated to grow at a CAGR of over 10% from 2022 to 2028.
RVs are becoming increasingly popular among Americans, and over 11% of households own them. And over 1 million households in the United States live in RVs full time. In addition, RV manufacturers are focusing on developing customized RVs with advanced technologies, which should bolster growth in the coming years.
Given this backdrop, recreational vehicle stocks REV Group, Inc. (REVG) and LCI Industries (LCII) could be solid buys this summer as people set out for travels and more outdoor activities.
REV Group, Inc. (REVG)
REVG designs, manufactures, and distributes specialty vehicles and related aftermarket parts and services in the United States and internationally. It operates through three segments Fire & Emergency; Commercial; and Recreation.
“We remain focused on delivering value for our shareholders and are committed to deploying the operational improvement initiatives under REV Drive. Within the quarter, we enacted additional pricing actions to align backlog and new orders with our current and future build costs. Backlog and demand for our vehicles remains strong, and we believe the actions we are taking position us for improved results,” said REV Group Inc. President and CEO Rod Rushing.
The consensus EPS estimate of $0.32 for the fiscal first quarter ending October 2022 represents a 16.7% improvement year-over-year. The consensus revenue estimate of $635.91 million for the same quarter represents a 7.8% increase from the same period last year.
The stock has gained 14% intraday to close yesterday’s trading session at $11.59.
REVG’s fundamentals are reflected in its POWR Ratings. The POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
REVG has an A grade in Value and a B in Quality. It is ranked #17 of 67 stocks in the Auto & Vehicle Manufacturers industry.
Beyond what is stated above, we’ve also rated REVG for Momentum, Stability, Sentiment, and Growth. Get all the REVG ratings here.
LCI Industries (LCII)
LCII manufactures and supplies components for the manufacturers of recreational vehicles (RVs) and adjacent industries in the United States and internationally. The company operates in two segments, Original Equipment Manufacturers (OEM); and Aftermarket.
For the fiscal first quarter ended March 31, 2022, LCII’s net sales increased 64.4% year-over-year to $1.64 billion. Its gross profit grew 92% from the year-ago value to $464.24 million. Net income for the quarter stood at $196.18 million, reflecting a 164.7% increase year-over-year. Moreover, its EPS was $7.71, up 163.1% from the prior-year quarter.
LCII’s revenue for the current quarter is expected to come in at $1.45 billion, indicating a 32.3% year-over-year growth. The company’s EPS is expected to increase 93.9% year-over-year to $5.20 for the same quarter.
LCII has gained 8.4% over the past month to close the last trading session at $116.37.
It is no surprise that LCII has an overall B rating, equating to Buy in our POWR Ratings system. The stock has an A grade in Growth. In the same industry, it is ranked #14.
In addition to the POWR Rating grades I’ve just highlighted, you can see the LCII’s ratings for Momentum, Stability, Sentiment, Value, and Quality here.
REVG shares were trading at $10.62 per share on Friday afternoon, down $0.42 (-3.80%). Year-to-date, REVG has declined -24.68%, versus a -17.31% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
2 Recreational Vehicle Stocks to Buy as the Summer Approaches StockNews.com
