WGO - Camping World: Setting Up For A Monster Rally But Beware Of Risks

• CWH has benefited from the boom in the RV industry. It posted record earnings in 2021, but the stock has lost more than 25% in 1 year.
• Its continued strong focus on used RVs bodes well for revenue growth given the stronger sales momentum for pre-owned RVs vs. new ones.
• CWH’s scale and brand equity strengthen its competitive advantage. The business has also enjoyed improved margins and returned capital to shareholders generously.
• At current multiples, which are 60% off the sector median and its 5 year average, the stock seems to be setting up for a monster rally with the possibility of a short squeeze given 40% of shares are held short.
• However, the risk of recession, the huge inventory on its books, and the rapid uptake of debt in an environment of increasing interest rates are risks that investors should watch closely.

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