Rev Group blasted past multiple buy points to a breakaway gap open Wednesday, after the company reported mixed fiscal fourth-quarter earnings and revenue along with increasing its cash dividend by 20%.
Rev Group reported early Wednesday that Q4 EPS came in at 51 cents, down about 4% vs. Q4 2023, while sales totaled $597.9 million, down 14% compared to a year ago. Prior to Wednesday, analysts expected earnings of 49 cents per share with revenue totaling $603 million.
The company also announced Wednesday a quarterly cash dividend of 6 cents per share of common stock, which equates to a rate of 24 cents per share on an annualized basis, a 20% increase from fiscal 2024.
For the full fiscal year, Rev Group profit jumped 17% to $1.59 per share with revenue decreasing 10% to $2.38 billion. analyst consensus had REVG earnings of $1.58 per share while revenue hitting the $2.38 billion mark, according to FactSet.
Looking ahead to 2025, Rev Group forecasts net sales in the range of $2.3 billion - $2.4 billion, below the analyst consensus forecast of $2.455 billion, with adjusted EBITDA coming in between $190 million-$220 million.
"We are entering the new fiscal year with robust earnings momentum," Chief Executive Mark Skonieczny said Wednesday in the earnings release.
Brookfield, Wis.-based Rev Group manufactures ambulances, buses, firefighting vehicles, recreational vehicles and other specialty vehicles. REVG owns brands that include American Coach, Fleetwood RV, Holiday Rambler, Renegade RV and Lance.
Rev Group stock soared 13.8% to 33.68 during stock market trade on Wednesday, jumping as high as 35.96 intraday. The gap up open bypassed a 31.07 handle buy point and a 31.85 cup-based entry.
That created a breakaway gap, a move that signals unusual strength in a stock. Investors can plot a buy point at the high mark of the first five minutes of trading. In this case that is 35.05, with a 5% buy range that runs to 36.80.
On Alert For Earnings
REVG shares have declined on the company's past three earnings releases. Fire and emergency equipment are REVG's largest source of revenue. But recreational vehicles are its most profitable segment. However, profit in the segment dropped 17.9% in 2023, vs. a 2,000% gain in adjusted earnings before interest, taxes, depreciation and amortization in the fire and emergency segment.
Following its earlier Q3 earnings report, Baird analysts wrote that REV Group's operating beat, slight EBITDA guidance raise, and continued strength in its Q3 fire & emergency segment were "not enough given heightened expectations" and continued recreation unit declines.
At the time, the firm reiterated its view that "the stock should eventually trade closer to the mid-$30s.
Analyst consensus puts REVG 2025 profit hitting $2.16 per share, representing a 59% increase compared to 2023 levels.
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Rev Group: RV Stocks
The seven stocks in the IBD-tracked Building-Mobile/Manufacturing & RV industry group have collectively added more than 24% this year. Leading the charge is Rev Group, which has soared 64%.
Cavco Industries and Champion Homes have both gained around 45% in 2024. SKY stock broke out Monday during stock market trade after being added to the S&P 600.
RV stocks broadly had a moment during the coronavirus pandemic, proving to be a winner in the travel space, as people moved away from airplanes. Between the end of March 2020 and March 2021, REVG shares surged 359% before retreating in 2022 and 2023. However, since trading around 10 in mid-2023, REVG has shot up more than 190%.
Rev Group stock has an 82 Composite Rating out of a best-possible 99. Shares also have a 90 Relative Strength Rating and a 95 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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