Camping World Holdings (CWH), mcap=$1.1bn, price $26.77 vs $25.18

Pitch: Largest RV dealer at 5.7x normalized mid-cycle FCF. Strong track record of revenue and EBITDA growth. FCF per share is expected to grow at 20% CAGR over the next 5-6 years. The market underestimates the long-term prospects of the business by overly focusing on the ST post-covid effects. The company continues to grow across all segments: RV dealership, aftermarket, and RV insurance business. Additionally, CWH is investing in P2P RV rental and used RV sale platforms, which provide further optionality and growth potential.

Valuation: CWH normalized mid-cycle EBITDA is at $600m (1/3 below 2021 EBITDA of $942m and 50-60% above 2017 EBITDA). Additional $200m of EBITDA from M&A and a further $214m from the growth of various businesses, for a total of $1.14bn EBITDA in 5 years. This translates to $750m FCF or $13/share assuming a 30% reduction in share count from buybacks. At 12-13x FCF that $157-170/share.

Exp. gain: +500% to $157/share in 5 years

Full CWH write-up (free guest account required):

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