Shares of specialty vehicle provider REV (REVG, Financial) dropped 11.09% following its second-quarter earnings report, causing a stock price decline to $26.86.
The company's revenue fell short of expectations, and its full-year revenue guidance also missed Wall Street estimates. Growth was notably affected in the specialty vehicle segment by a decrease in terminal truck shipments. Similarly, the recreational vehicle segment faced reduced unit shipments and increased discounting pressures, leading to a decline in backlogs due to lower order intake and cancellations.
Interestingly, despite these setbacks, REV Group exceeded analysts' EPS expectations for the quarter. Additionally, its full-year EBITDA guidance surpassed Wall Street estimates, offering some positive news amid overall disappointment.
According to detailed financial metrics, REV Group Inc (REVG, Financial) boasts a market capitalization of $1.39 billion and a price-to-earnings (P/E) ratio of 6.57. The company's price-to-book (P/B) ratio stands at 3.67, and its earnings growth over the past year has been substantial at 124.2%. However, the stock has several warning signs, including being close to its 10-year high and having a forward P/E ratio higher than its trailing P/E ratio.
The company's Altman Z-score of 4.26 indicates strong financial health, while its Piotroski F-Score of 7 suggests a very healthy situation. Additionally, the Beneish M-Score of -2.98 implies that the company is unlikely to be a manipulator.
Other notable metrics include an operating margin expansion, currently at 4.05%, which is generally a positive indicator. REV Group's return on equity (ROE) is an impressive 52.82%, and the return on assets (ROA) stands at 17.49%.
However, it's important to note that the company's return on invested capital (ROIC) is less than its weighted average cost of capital (WACC), which raises concerns about capital efficiency. In terms of valuation, REV Group appears significantly overvalued compared to its GF Value. The current GF Value estimation is $16.04, indicating that the stock might be trading above its intrinsic value. For more detailed insights, visit the GF Value page.
As for market performance, the stock has experienced a 132.59% increase over the past 52 weeks. Despite the recent dip, long-term investors might find value in the company's strategic segments like Fire & Emergency, which continues to be its major revenue driver.
