Camping World (CWH) Set to Acquire Roth RV in Minnesota
Camping World Holdings, Inc. CWH recently announced plans to acquire Roth RV, including locations at Bemidji, Grand Rapids and Deerwood. The initiative will bring the company’s Minnesota location count to 11.
The company is optimistic about this new acquisition as it aims to expand its market presence in Minnesota. This strategic transaction is expected to close in the second quarter of 2024.
Camping World is on an expansion spree, aiming to increase its dealership count to more than 320 locations over the next five years. This target is expected to be achieved through a strategic mix of acquisitions, new store openings and manufacturer-exclusive locations.
Acquisition Strategies Bode Well
Camping World primarily focuses on strategic investments in acquisitions to increase its footprint. It aims at maximizing the returns of working capital to continue its supercharged acquisition plan, which directly sparks its growth prospects.
During third-quarter 2023 earnings call, Camping World stated that it added 16 locations over the past year (from Oct 2022) and intends to continue to add to its growth pipeline.
On Jan 2, 2024, CWH closed the acquisition of Ashley Outdoors in Salem, AL. Including this location, the company intends to add 15 dealership locations in the first quarter of 2024 through a mix of opening existing facilities and closing previously-announced buyouts. On Oct 23, 2023, the company inked a deal to acquire Travelcamp RV, which will add 12 locations across Florida, Georgia, North Carolina, South Carolina and Texas, by January 2024.
Given the solid pipeline of acquisitions, the company expects to end 2024 with more than 220 locations.
Price Performance
Shares of this recreational vehicle dealer have increased 47.2% in the past three months, outperforming the Zacks Leisure and Recreation Services industry’s 19.3% growth. This uptrend can be attributed to its consistent acquisition initiatives accompanied by an increase in same-store used vehicle unit sales. Also, its efforts to reduce expenses bode well.
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However, price fluctuations along with lower demand and stocking levels of lifestyle, activities, design and home products remain headwinds. The company remains cautious in this regard. Meanwhile, earnings estimates for 2024 have declined in the past 60 days, depicting analysts' concerns regarding the stock’s growth potential.
Zacks Rank & Key Picks
Camping World currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Consumer Discretionary sector.
Stride, Inc. LRN sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
It has a trailing four-quarter earnings surprise of 44.3%, on average. The stock has surged 75.8% in the past year. The Zacks Consensus Estimate for LRN’s fiscal 2024 sales and earnings per share (EPS) suggests rises of 9.1% and 34.7%, respectively, from the year-ago period’s levels.
H World Group Limited HTHT currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 94.5%, on average. The stock has declined 30.3% in the past year.
The Zacks Consensus Estimate for HTHT’s 2024 sales and EPS indicates improvement of 7.9% and 9.8%, respectively, from the year-ago period’s levels.
American Public Education, Inc. APEI currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 23.2%, on average. The stock has declined 14.5% in the past year.
The Zacks Consensus Estimate for APEI’s 2024 sales and EPS suggests growth of 2.5% and 115.8%, respectively, from the year-ago period’s levels.
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