How Investors Are Reacting To REV Group (REVG) Surging Municipal Backlog After Bus Division Sale

• REV Group, Inc. recently reported strong backlog and pricing gains in its municipal business, especially within fire trucks and ambulances, following the divestment of its bus division and active share repurchases.
• Under CEO Mark Skonieczny, the operational restructuring has sharpened the business focus and improved performance in core specialty vehicle segments.
• We'll examine how revitalized municipal demand and operational shifts are influencing REV Group's broader investment case ahead.

Find companies with promising cash flow potential yet trading below their fair value.

REV Group Investment Narrative Recap

To invest in REV Group today, you need to believe that focused execution in specialty vehicles can sustain earnings growth, even as demand cycles shift. The recent strength in municipal backlogs is supportive of near-term growth catalysts but does little to offset the ongoing risk that a more concentrated set of end markets could increase vulnerability to downturns, especially with continued inflationary headwinds and tariffs persisting into 2026. The pending $3.2 billion merger agreement with Terex Corporation is especially timely, as it directly addresses the path forward amid changing market exposures, and may influence both risk and reward as municipal momentum continues to build. Yet, in contrast to these growth drivers, investors should be aware that reliance on municipal and emergency vehicle demand means any funding disruptions or cyclical weakness could...

Read the full narrative on REV Group (it's free!)

REV Group's narrative projects $2.9 billion revenue and $218.0 million earnings by 2028. This requires 6.0% yearly revenue growth and a $110.0 million earnings increase from $108.0 million today.

Uncover how REV Group's forecasts yield a $62.80 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have provided two fair value estimates for REV Group, ranging from US$41.37 to US$62.80. With a pending merger and greater emphasis on fire and ambulance markets, these estimates highlight how investor expectations can vary, especially as the company's revenue mix becomes more concentrated.

Explore 2 other fair value estimates on REV Group - why the stock might be worth 21% less than the current price!

Build Your Own REV Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your REV Group research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
• Our free REV Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate REV Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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