Winnebago Industries (NYSE:WGO) Q4 2020 Earnings Preview

in EARNINGS/INVESTING IDEAS by

Winnebago Industries, Inc. (NYSE:WGO) is scheduled to report Q4 earnings results before markets open for trading on October 21, 2020.

The company is expected to report earnings of $0.93/share on revenue of $722.9 million. The consensus earnings per share (EPS) of $0.93/share is based on a poll of 9 analysts and represents a decline in eps of −8.7% over the same quarter last year, when the company reported earnings of $1.01/share.

The revenue forecast of $722.9 million based on a poll of 8 analysts implies a year-over-year (YoY) growth in revenue of 36.3%. Last year the company reported $530.4 million in revenue for the quarter.

Expected to report EPS contraction of −8.7% for Q4, 2020
Metric Expected Prior Year YoY Change
Revenue $722.94 $530.40 36.3%
EPS $0.93 $1.01 −8.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Winnebago Industries, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2020 -$0.37 -$0.26 −30.3% Missed
Q2, 2020 $0.67 $0.67 0.2% Beat
Q1, 2020 $0.59 $0.73 24.1% Beat
Q4, 2019 $1 $1.01 1.3% Beat
Q3, 2019 $1.01 $1.04 2.9% Beat
Q2, 2019 $0.60 $0.61 1.9% Beat
Q1, 2019 $0.67 $0.70 4.0% Beat
Q4, 2018 $0.91 $0.97 6.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending May 30, 2020, the stock price reacted by falling −3.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
June 24, 2020 $70.90 $68.42 −3.5% Decline
March 25, 2020 $24.10 $31.07 28.9% Increase
December 20, 2019 $48.14 $51.91 7.8% Increase
October 23, 2019 $42.74 $50.01 17.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.00, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.00 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Winnebago Industries, Inc. is currently trading at $56.02/share, up 1.6% for the day. The company is trading at approximately 77.2% of its 52-week high of $72.65/share. The company’s stock price is down −18.1% since the last earnings report and up 6.0% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 57.27 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:WGO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 37.13 and a forward P/E multiple of 28.91.

Winnebago Industries, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.41. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q3
Period End Date May 30, 2020
Stock Price (Current) $56.02
P/E Ratio 37.1x
P/E Ratio (Fwd) 28.9x
PEG Ratio −0.7
Total Debt / Total Capital 21.1%
Levered Free Cash Flow $175.6 million
EV / EBITDA 15.6x

Finbox

Winnebago Industries, Inc. is a small-cap stock with a market capitalization of $1.859 billion and a total enterprise value of $2.207 billion. The company operates in the Consumer Discretionary sector and the Automobiles industry.

Winnebago Industries, Inc. manufactures and sells recreation vehicles and marine products primarily for use in leisure travel and outdoor recreation activities. The company operates in five segments: Grand Design Towables, Winnebago Towables, Winnebago Motorhomes, Chris-Craft Marine, and Winnebago Specialty Vehicles. It provides towable products that are non-motorized vehicles to be towed by automobiles, pickup trucks, SUVs, or vans for use as temporary living quarters for recreational travel, such as conventional travel trailers and fifth wheels under the Winnebago and Grand Design brand names; and other outdoor lifestyle products under the Chris-Craft brand name. The company also offers motorhomes, which are self-propelled mobile dwellings used primarily as temporary living quarters during vacation and camping trips, or to support active and mobile lifestyles under the Winnebago brand name. In addition, it offers other specialty commercial vehicles for law enforcement command centers, mobile medical clinics, and mobile office spaces; commercial vehicles as bare shells to third-party up fitters; and boats in the recreational powerboat industry. Further, the company is involved in the original equipment manufacturing of parts for other manufacturers and commercial vehicles. The company sells its products primarily through independent dealers in the United States and Canada. Winnebago Industries, Inc. was founded in 1958 and is based in Forest City, Iowa.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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