REV Group (REVG): Gauging Valuation After Strong RV Sales and New Model Launches

REV Group’s Recreational Vehicles segment enjoyed a boost at two industry shows after unveiling both the triple-slide Valencia and a refreshed Vienna model. These models drew strong attendee interest and led to higher sales compared to last year.

See our latest analysis for REV Group.

Investor enthusiasm has been building around REV Group, as momentum from the successful RV launches appears to be fueling the stock’s rally. With a 1-year share price return of 86.75% and an impressive 107.07% total shareholder return over the past year, sentiment is clearly strong. The longer-term picture also appears positive, with a five-year total return north of 790%.

If the buzz from REV’s big year has you wondering what else is on the move, now’s a great time to discover See the full list for free.

Yet with shares surging nearly 87% over the past year, the key question for investors now is whether REV Group remains undervalued or if the market is already factoring in future growth, which may leave limited room for upside.

Most Popular Narrative: 9.6% Undervalued

With the narrative fair value at $65.75 and REV Group closing last at $59.46, market optimism trails analysts’ conviction. Here is what the most-followed narrative sees as a driving force for REV’s future opportunities.

Continued operational investments, such as the Spartan Emergency Response facility expansion, enhance production capacity and efficiency, positioning REV Group to capitalize on sustained municipal demand for fire and emergency vehicles as aging fleets require replacement, supporting long-term revenue growth and scale-driven margin improvements.

Read the complete narrative.

Want to know how much future growth, margin expansion, and a lower profit multiple unlock this higher fair value? The narrative hints at a massive turnaround driven by operational shifts and big leaps in future earnings. Which bold financial assumptions are key? The details might surprise you. Explore what is really powering the calculation.

Result: Fair Value of $65.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent inflation or a slowdown in municipal budgets could easily derail these bullish expectations. This may make future gains less certain.

Find out about the key risks to this REV Group narrative.

Another View: The Multiples Debate

Looking at valuation from a different angle, REV Group’s price-to-earnings ratio currently sits at 26.9x, which is well above both its peer average of 16.7x and the broader US Machinery industry standard of 24.1x. The fair ratio, which the market could eventually trend toward, stands even higher at 33.4x. This discrepancy signals a meaningful valuation gap and raises the possibility of risk if sentiment shifts or opportunity if the business delivers. What does this divergence say about the company’s future pricing power?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own REV Group Narrative

If you see things differently or prefer hands-on analysis, you can dive in and build your own take on REV Group’s story in under three minutes. Do it your way

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.

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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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