Rev Group (REVG, Financial) saw its stock drop by 10.76% after reporting better-than-expected earnings but lowering its outlook for the full year. The stock price fell to $26.96, reflecting investor concerns over future revenue projections.
Rev Group, a manufacturer of recreational vehicles (RVs) and specialty trucks, reported fiscal third-quarter earnings of $0.48 per share, exceeding Wall Street's estimate of $0.42. However, its revenue of $579.4 million missed the consensus by about $40 million, contributing to the stock decline.
The specialty-vehicle segment achieved a double-digit EBITDA margin due to strong demand for fire and ambulance equipment. Despite this, CEO Mark Skonieczny noted that RV market conditions remain challenging and the company continues to manage costs to align with demand and maintain expected operating margins.
Rev Group adjusted its full-year fiscal 2024 revenue outlook downward by $50 million to a range of $2.35 billion to $2.45 billion, indicating potential downside to the consensus estimate of $2.44 billion. This revision may be a factor causing investor concern.
Valuation-wise, Rev Group (REVG, Financial) has a PE ratio of 6.59 and a price-to-book ratio of 3.69. The company's financial strength is reflected in its Altman Z-score of 4.26, indicating a strong financial position. Additionally, the Piotroski F-Score of 7 and Beneish M-Score of -2.98 suggest that the company is in good financial health and unlikely to be a manipulator.
However, the stock carries several warning signs. The forward PE ratio is higher than the trailing PE, indicating potential earnings decline. The company's return on invested capital (ROIC) is less than the weighted average cost of capital (WACC), suggesting it might not be capital efficient. Additionally, the dividend yield is close to a 2-year low, and the price is near a 10-year high.
The company's GF Value is $16.04, indicating that the stock is "Significantly Overvalued" according to GuruFocus. For more details, investors can visit the GF Value page.
