Remote Work And Experiential Travel Will Expand The RV Market

Key Takeaways

• Strategic focus on used inventory, scalable procurement, and omni-channel operations positions the company for resilient, above-market growth and sustained margin expansion.
  
• Enhancements in proprietary products and services, along with cost efficiencies, are driving higher recurring revenue and improving customer lifetime value.
  
• Structural demographic and market shifts, margin pressures, high debt, and competitive threats jeopardize long-term growth and profitability for Camping World Holdings.

Catalysts

Together its subsidiaries, retails recreational vehicles (RVs), and related products and services in the United States.

• While analysts broadly agree that market share gains from a broader customer base and affordable RVs will drive steady growth, the management team now anticipates reaching 20 percent market share in new and used RV retail sales in the medium term, suggesting a far faster and more sustained revenue and earnings trajectory than consensus expects.
  
• Whereas the analyst consensus expects moderate margin improvement from SG&A cuts and store consolidation, management has already delivered record per-store productivity and sees a clear path to over 600 to 700 basis points of SG&A improvement if ASPs recover, with more than $10–15 million of cost savings outstanding-driving meaningful net margin and EBITDA expansion, even in a slow macro backdrop.
  
• The company's strategic pivot towards high-velocity used inventory and scalable procurement methods positions Camping World to consistently deliver double-digit used sales growth and maintain gross margins around 20 percent, creating a sustainable, counter-cyclical earnings engine that is far less dependent on the volatile new RV market.
  
• The rapidly strengthening trend toward domestic, experience-centric travel-amplified by remote work flexibility among younger generations-is expanding the RV addressable market at an accelerating pace, which, combined with Camping World's omni-channel ecosystem and contract manufacturing, supports a larger, long-term revenue base and higher customer lifetime values than the market prices in today.
  
• Accelerated investments in proprietary RV models, services, and technology are allowing Camping World to capture more customer lifetime value through earlier trade-ins, robust aftermarket/workshop revenue, and recurring Good Sam memberships-supporting higher average revenue per customer, higher-margin recurring income streams, and substantially above-consensus long-term profitability.

Camping World Holdings Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Camping World Holdings compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Camping World Holdings's revenue will grow by 3.6% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from -0.1% today to 8.4% in 3 years time.
• The bullish analysts expect earnings to reach $592.2 million (and earnings per share of $4.79) by about August 2028, up from $-8.2 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 7.4x on those 2028 earnings, up from -135.5x today. This future PE is lower than the current PE for the US Specialty Retail industry at 19.2x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.0%, as per the Simply Wall St company report.

Camping World Holdings Future Earnings Per Share Growth

Risks

• Long-term demographic shifts, including an aging Baby Boomer customer base and lower RV ownership interest among younger generations, pose a structural risk to future demand and could lead to declining revenues for Camping World Holdings.
  
• Urbanization trends, shrinking household sizes, and more people living in spaces unsuitable for RV ownership may erode the addressable customer base, causing stagnation or contraction in top-line revenue growth in coming years.
  
• The company's increasing reliance on used RV sales-which carry structurally lower gross margins compared to new units-could place persistent pressure on blended gross profit and reduce overall net margins in the long term.
  
• Despite recent deleveraging efforts, management acknowledges being uncomfortable with current leverage levels; high debt burdens could limit strategic flexibility, constrain future earnings growth, and impede the company's ability to invest during downturns.
  
• Higher costs from decarbonization, regulatory compliance, labor, and input inflation, as well as potential disruption from direct-to-consumer sales by manufacturers and e-commerce competitors, may continue to compress margins and threaten both revenue and EBITDA.

Valuation

• The assumed bullish price target for Camping World Holdings is $27.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Camping World Holdings's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $27.0, and the most bearish reporting a price target of just $14.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $7.0 billion, earnings will come to $592.2 million, and it would be trading on a PE ratio of 7.4x, assuming you use a discount rate of 9.0%.
  
• Given the current share price of $17.66, the bullish analyst price target of $27.0 is 34.6% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.