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Why Is Winnebago (WGO) Up 6.7% Since Last Earnings Report?

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It has been about a month since the last earnings report for Winnebago Industries (WGO). Shares have added about 6.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Winnebago due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Winnebago Maintains Its Earnings Beat Streak in Q4

Winnebago reported fourth-quarter fiscal 2021 (ended Aug 28, 2021) adjusted earnings per share of $2.57, surpassing the Zacks Consensus Estimate of $1.98 and surging 77.2% year over year. This outperformance can be attributed to higher-than-anticipated revenues across both Towable and Motorhome segments.

This recreational vehicle maker reported revenues of $1,036 million for the quarter under review, outpacing the Zacks Consensus Estimate of $943 million. Further, the top line grew 40.4% year over year.

Segmental Performance

Revenues in the Towable segment for the reported quarter soared 35.3% year over year to $560 million, primarily on solid consumer demand for Grand Design and Winnebago branded products. The reported figure also topped the consensus mark of $543 million. Quarterly adjusted EBITDA rose 36% year on year to $83.4 million, courtesy of favorable pricing and operational discipline. The metric also beat the consensus mark of $73 million. Backlog in the segment amounted to $1,704.4 million (46,590 units), up a whopping 127.9% year over year.

For the reported quarter, revenues in the Motorhome segment improved 48.7% year over year to $448.9 million, thanks to strong demand for Newmar and Winnebago branded products. The revenue figure also surpassed the Zacks Consensus Estimate of $405 million. The segment recorded an EBITDA of $50.4 million, skyrocketing 159.1% year over year. Also, the segment’s backlog was $2,303.5 million (18,254 units), which jumped 119.1% year on year, highlighting surging consumer demand during the reported quarter.

Financials 

Winnebago had cash and cash equivalents of $434.6 million as of Aug 28, 2021, up from $292.6 million on Aug 29, 2020. Long-term debt (excluding current maturities) totaled $528.6 million, slightly up from $512.6 million recorded on Aug 29, 2020.

During the quarter under review, Winnebago repurchased shares of $35.4 million. In fiscal 2021, the firm returned $61.6 million to shareholders via dividends ($16.2 million) and buybacks ($45.4 million).

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 25.09% due to these changes.

VGM Scores

At this time, Winnebago has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Winnebago has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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