1. Winnebago Industries Inc. (WGO)
Price-Based Multiples
Relevant Information
Company Information
Stock Rating: BUY
Price Target N/A
Current Price $19.91
Analysts Andrew Nikolai
Dan Zatony
Matt DiCenso
Michael Liamos
Industry
Consumer Discre-
tionary
Market Cap $.5357 B
Shares Out. 26.9 M
Sales $971.4 M (TTM)
Beta 0.99
Employees 2,850
LTM Ind
P/E 12.54 27.28
P/B 2.54 3.91
EV/EBITDA 7.24 13.76
O-Margin 6.76%
EPS 1.59 (TTM)
Dividend Yield 1.81%
52-Week Range 17.80-26.44
ROE 24.79%
ROA 13.50%
ROIC 27.48%
Company Overview
Winnebago Industries manufactures motor homes that are self contained
recreation vehicles used primarily in leisure travel and outdoor recreation
activities. The motor homes are sold through dealer organizations under the
Winnebago, Itasca, Rialta, and Ultimate brand names. Winnebago also manu-
factures extruded aluminum, commercial vehicles, and components.
Investment Thesis
Internal improvements
Winnebago has made significant investments in Enterprise Resource Plan-
ning, Product Life Cycle management, and strategic outsourcing. Although it
will have a current negative impact on their bottom line it should provide
long term benefits to WGO’s margins.
Brand strength
Winnebago is the most recognized name in the RV industry, partially due to
their products being featured in films and TV shows. Additionally, WGO has
been an innovation leader in their industry, making yearly product improve-
ments and introducing new products.
Diversifying revenue
Winnebago has recently been directing more attention to the Towables mar-
ket. Over the past 4 years this revenue stream has increased from 3.4% to
7.3%. Towable net revenue experienced growth of about 23% over the past
year. The towable market is significantly larger than the motorized market
and represents a large opportunity for growth.
Thesis Risks
Hiring constraints
Operations being located in Northern Iowa may create difficulties in hiring
enough skilled employees to meet production needs
Dependent on large dealer organizations
Two dealer organizations accounted for 17.9% and 15% of FY15 net revenue.
Loss of one of these would significantly hurt WGO