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Winnebago (WGO) Down 11% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Winnebago Industries (WGO - Free Report) . Shares have lost about 11% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Winnebago due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Winnebago’s Q4 Earnings & Revenues Trump Estimates

Winnebago Industries reported earnings of 94 cents per share in the fourth quarter of fiscal 2018 (ended Aug 25, 2018), beating the Zacks Consensus Estimate of 86 cents. In the year-ago quarter, earnings were 79 cents per share. Net income rose 19.5% year over year to $29.8 million.

Revenues in the reported quarter climbed 17.9% to $536.2 million from $454.9 million in the prior-year quarter. The figure outpaced the Zacks Consensus Estimate of $514 million.

Operating income in the quarter under review rose 5.1% to $45.7 million from $43.5 million in the year-ago quarter. Gross profit improved to $83.8 million from $73.6 million a year ago.

For 2018, earnings per share were $3.22, up 38.8% year over year.

Full-year revenues of $2 billion increased 30.4% year over year driven by continued growth at the Towable segment.

Segment Results

Revenues at the Motorized segment rose 2.5% to $228.5 million from the year-ago period. Adjusted EBITDA dropped 18.8% to $13.2 million.

Revenues at the Towable segment improved 26.2% to $288.7 million from the third quarter of last fiscal. This upside was driven by strong organic growth across Grand Design RV and Winnebago-branded product lines. Adjusted EBITDA was $41.9 million, up 23.9% from the prior-year quarter.

Financial Position

Winnebago had cash and cash equivalents of $2.34 million as of Aug 25, 2018, compared with $35.9 million as of Aug 26, 2017.

For the first nine months of fiscal 2018, Winnebago’s cash flow from operations was $83.3 million compared with $97.1 million during the same period in fiscal 2017.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.95% due to these changes.

VGM Scores

Currently, Winnebago has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Winnebago has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.




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