Executive Summary / Key Takeaways

• Idiosyncratic Growth Strategy: Camping World is executing a deliberate pivot from a cyclical new RV retailer to a resilient ecosystem anchored by used vehicle sales, service operations, and Good Sam membership revenue. This structural shift aims to eliminate the wild earnings swings that have historically plagued the RV industry.

• Market Share Dominance Amid Consolidation: The company has grown combined new and used market share from 11.2% in 2024 to over 14% in early 2025, achieving this while closing 16 underperforming locations and reducing headcount by 1,000 since January 2025. This demonstrates that growth is coming from productivity gains, not just footprint expansion.

• Financial Fortification: A $330 million growth capital raise in October 2024 and a $300 million expansion of the floor plan facility to $2.15 billion have strengthened the balance sheet. Management states it "has never been stronger," providing ammunition for both organic growth and opportunistic M&A.

• Operational Leverage in Action: SG&A as a percentage of gross profit improved 360 basis points year-over-year in Q3 2025, with management committed to a 600-700 basis point improvement target. This is being driven by location consolidation, headcount reduction, and AI-driven cost takeouts.

• Critical Execution Variables: The investment thesis hinges on three factors: sustaining double-digit used vehicle unit growth, achieving the aggressive SG&A reduction target, and navigating a challenging new vehicle environment with rising OEM prices and consumer resistance.

Setting the Scene: The RV Industry's Largest Player Rewrites the Playbook

Camping World Holdings, founded in 1966 in Lincolnshire, Illinois, has evolved from a traditional RV retailer into a comprehensive ecosystem serving the RV lifestyle. The company operates two distinct segments: Good Sam Services and Plans, which provides roadside assistance, protection plans, and membership programs; and RV and Outdoor Retail, which encompasses new and used vehicle sales, finance and insurance, service, and parts.

The RV industry faces significant headwinds. Rising interest rates have pressured consumer financing, while tariff uncertainty and inflation concerns have created demand volatility. New RV registrations in the US declined 0.3% for the twelve months ended August 31, 2025, while used registrations fell 2.9%. Wholesale shipments remain below historical peaks, with the industry trending down low-to-mid single digits year-over-year.

Against this backdrop, Camping World has achieved record combined new and used market share of over 14% in early 2025, up from 11.2% in 2024. This gain is particularly notable because it occurred while the company deliberately consolidated its store base, closing 16 locations over a five-to-six month period. The strategy is clear: fewer, more productive rooftops generating higher unit volumes and profitability per location.

Technology, Products, and Strategic Differentiation: Building Moats Beyond the Showroom

Camping World's competitive advantage extends beyond its scale. The company has developed a multi-pronged strategy that creates switching costs and recurring revenue streams.

Contract Manufacturing and Private Label: Approximately 40% of new sales are derived from exclusively branded and contract-manufactured products. This started as a way to offer lower prices but has evolved into an innovation sandbox. The company can test new floor plans, segments, and features without waiting for traditional OEM cycles. This provides margin protection and accelerates the trade cycle, as these units often return as used inventory within 2-3 years. The R&D capability allows Camping World to be disruptive on opening price points across all segments, from $69,000 Class C motorhomes to $100,000 Class A units.

Good Sam Ecosystem: The Good Sam Club, despite a 10.9% decline in paid members due to a free tier introduction in late 2023, remains a "bedrock" of the company. Management notes nearly 1 million additional members in the free tier not reported in paid numbers, creating a funnel for future upsell. The segment provides stable, high-margin revenue (56.6% gross margin in Q3 2025) and multiple customer touchpoints for finance, insurance, and service offerings. The June 2024 acquisition of a tire rescue roadside assistance business for $1.8 million added a robust dispatch platform and service provider network, though it contributed to margin compression in 2025.

Used Vehicle Supply Chain: Camping World has built a centralized procurement team capable of flexing values and buying in real-time. Used vehicle revenue surged 31.7% in Q3 2025 on 32.9% unit growth, with gross margins of 18.3%—nearly 600 basis points higher than new vehicles. The company views the used market as "double the size of the new market" with "unbelievable white space." Record procurement levels in January and February 2025 demonstrate the scalability of this capability.

AI and Technology Implementation: Management sees $15 million in additional cost takeout opportunities in 2026 through marketing technology, two new CRMs, and agentic AI implementation. This technology investment aims to improve customer conversion, employee efficiency, and yield greater cost savings than seen in 20 years. The goal is to support the 600-700 basis point SG&A improvement target while enhancing customer experience.

Financial Performance & Segment Dynamics: Evidence of a Transforming Business

Q3 2025 results demonstrate the strategy's effectiveness. Revenue grew 4.7% to $1.81 billion, while adjusted EBITDA surged 40% to $95.7 million. This leverage came despite headwinds in the new vehicle business.

Used Vehicles: The Growth Engine: Used vehicle revenue of $589 million increased 31.7% year-over-year, driven by a 32.9% increase in unit sales to 18,694. Gross margin expanded 16 basis points to 18.3%. The average selling price declined only 0.9% to $31,512, showing pricing discipline in a growing volume environment. Management's goal is to increase inventory turns to 4x, potentially sacrificing some margin for dollar yield. The used business provides a "floor" to earnings, reducing cyclicality and substantiating a higher valuation multiple.

New Vehicles: Facing Headwinds: New vehicle revenue declined 7% to $766.8 million despite a 1.7% increase in unit sales to 20,286. Average selling price fell 8.6% to $37,798, compressing gross margin by 81 basis points to 12.7%. Management sees "resistance on the new side" due to rising OEM pricing on like-for-like models and consumer economic concerns. They are modeling a conservative outlook for 2026, anticipating low-to-mid single-digit industry declines but expect to outperform through exclusive products and affordability strategies.

Good Sam Services: Margin Pressure: Revenue increased 3.3% to $52.5 million, but gross margin compressed from 61.3% to 56.6% due to incremental roadside assistance claims and tire rescue program costs. Segment adjusted EBITDA declined 8.7% to $21.6 million. Management expects margin improvement in 2026 as investments in the roadside business yield returns. The membership decline is stabilizing, with the free tier creating a future conversion opportunity.

Finance & Insurance: Leveraging Volume: Revenue grew 7.2% to $178.3 million, driven by a 14.6% increase in total vehicle unit sales. Gross margin remains 100%, and management sees opportunities to grow gross dollars as ASPs rise, with the cost structure remaining largely unchanged. This creates operating leverage as volume increases.

SG&A Leverage: Selling, general and administrative expenses decreased $10.8 million in employee compensation and $5.1 million in advertising, partially offset by increases in service provider fees and commissions. As a percentage of gross profit, SG&A improved 360 basis points year-over-year. Management remains "dead set" on achieving the 600-700 basis point improvement target, viewing it as critical to reaching mid-cycle EBITDA of $500 million.

Balance Sheet Strength: Working capital of $540.7 million includes $230.5 million in cash and cash equivalents. Total debt stands at $2.98 billion, but management has made "tremendous strides" on net leverage, reducing it by nearly 3 turns since the beginning of the year through debt paydown, earnings improvement, and cash generation. The company owns $123.9 million in real estate and has $427 million in used inventory owned outright, providing asset backing.

Outlook, Management Guidance, and Execution Risk

Management's 2026 guidance reflects an "ultra-conservative approach" driven by uncertainty around tariffs, interest rates, and consumer sentiment. The baseline scenario assumes an adjusted EBITDA floor of $310 million, with multiple sources of upside:

1. SG&A Improvement: $15 million in additional cost takeouts from technology and AI not included in preliminary models
2. Used Vehicle Upside: Every 1,000 additional used units yield roughly $6 million in adjusted EBITDA
3. M&A Activity: No acquisitions are embedded in models, but management sees a pipeline for 10+ store growth per year
4. New Vehicle Recovery: Conservative forecasting toward the lower end of demand scenarios, with ability to restock within 60-90 days if conditions improve

The mid-cycle adjusted EBITDA target of $500 million on the current store base requires industry volume of around 400,000 units, stable new business, and SG&A as a percentage of gross profit in the mid-70s. Management believes this is achievable as the used business grows and provides a more stable earnings foundation.

Management Transition: Marcus Lemonis will step down as CEO on January 1, 2026, with Matthew Wagner succeeding him. Wagner has served as President and is deeply involved in the operational improvements and strategy execution. Brent Moody becomes Chairman. The transition appears to be a planned succession rather than a strategic pivot, with Lemonis remaining as Co-Founder and Special Advisor.

Risks and Asymmetries: What Could Break the Thesis

Debt Burden and Interest Rate Sensitivity: With $2.98 billion in total debt and a debt-to-equity ratio of 7.82, Camping World remains highly leveraged. While management has reduced borrowing rates and improved terms, the company is still exposed to interest rate volatility. Floor plan interest expense decreased due to a 134 basis point reduction in average borrowing rates, but any reversal could pressure margins. The company is "worried about inflation on things like food and gas" that could crowd out discretionary spending.

Supplier Dependence: Approximately 70% of new RVs come from a handful of OEMs like Thor Industries and Winnebago . This dependence creates vulnerability to production cuts, quality issues, and pricing power. Management notes they need OEM units for "credibility, web traffic, and leads," even as they expand contract manufacturing. Any disruption in supply relationships could impact new vehicle availability and market share.

Consumer Demand Fragility: Management acknowledges "resistance on the new side" and is modeling conservatively for 2026. The company is "operating our business as if they're going to be off about $2,000" per unit, proactively cutting costs to offset potential declines. If economic conditions deteriorate beyond expectations, even the used vehicle business could face pressure as consumers delay purchases entirely.

Execution Risk on Cost Reduction: The 600-700 basis point SG&A improvement target is aggressive and requires continued location consolidation, headcount reduction, and technology implementation. Management has already closed 16 locations and reduced headcount by 1,000. Further cuts could impact customer service and sales effectiveness if not executed precisely.

Upside Scenarios: If new vehicle demand proves stronger than the conservative forecast, Camping World can restock within 60-90 days and capture significant upside. The used vehicle business could exceed high-single-digit growth targets, yielding $6 million per 1,000 incremental units. M&A opportunities remain active, with management noting they are "never on a pause for M&A" but being more thoughtful about capital allocation.

Competitive Context and Positioning

Camping World's competitive advantages are most evident when compared to publicly traded peers:

Versus Thor Industries (THO) and Winnebago (WGO): As manufacturers, THO and WGO lack direct customer relationships and service revenue. THO's gross margin of 14.05% and WGO's 13.05% pale compared to Camping World's 29.94%. While THO and WGO control production, Camping World controls the customer experience, financing, and aftermarket services. The company's ability to gain share while these manufacturers face volume declines demonstrates the power of its integrated model.

Versus MarineMax (HZO): Both companies operate dealership networks with service and financing, but HZO's marine focus faces different cyclicality. HZO's gross margin of 32.49% is comparable, but its operating margin of 2.06% lags Camping World's 4.45%, reflecting less effective cost management. HZO's net loss of $1.43 per share in FY2025 contrasts with Camping World's positive operating cash flow of $245 million.

Versus Patrick Industries (PATK): As a component supplier, PATK operates in a different part of the value chain. Its gross margin of 22.91% and operating margin of 6.79% reflect manufacturing economics, but it lacks the recurring service revenue and customer loyalty that Camping World builds through Good Sam.

Digital and Indirect Competition: Online marketplaces like RV Trader create pricing transparency but lack service integration. Alternative travel options like glamping compete for discretionary dollars but don't offer the ownership experience. Camping World's physical footprint and service capabilities create switching costs that pure digital players cannot match.

Valuation Context: Trading on Transformation Potential

At $10.47 per share, Camping World trades at an enterprise value of $4.21 billion, or approximately 0.69x trailing twelve-month revenue of $6.10 billion. This revenue multiple is above Thor Industries (0.60x) and Winnebago (0.55x), despite superior gross margins and market share gains.

The company generated $245 million in operating cash flow and $154 million in free cash flow over the trailing twelve months, providing a free cash flow yield of approximately 3.7% on enterprise value. This positive cash generation is notable for a company with negative net income of -$38.6 million, reflecting the non-cash nature of certain charges and the working capital efficiency of the model.

Key metrics to monitor:

• EV/EBITDA: 13.33x based on Q3 2025 annualized EBITDA of $316 million, though management targets mid-cycle EBITDA of $500 million, which would imply 8.4x EV/EBITDA at current valuation
• Debt/EBITDA: Leverage has improved "nearly 3 turns" since January 2025, with management targeting "4 or below" by end of 2026
• Cash Position: $230.5 million in cash plus $427 million in unencumbered used inventory provides liquidity
• Asset Backing: $123.9 million in owned real estate and $173 million in parts inventory

The valuation appears to be pricing in execution risk around the debt load and new vehicle market uncertainty, while not fully crediting the structural shift toward higher-margin used vehicles and services. The stock trades at a discount to recreational retail peers on revenue multiples despite superior market position and operational metrics.

Conclusion: A Transforming Market Leader at an Inflection Point

Camping World is executing a deliberate strategy to transform from a cyclical RV retailer into a more resilient, ecosystem-driven business. The 14% market share gain in a declining industry, achieved while consolidating locations and reducing headcount, demonstrates the power of its scale and operational focus. The pivot to used vehicles, which generate 600 basis points higher gross margins than new units, provides a structural earnings floor that reduces volatility and justifies a higher valuation multiple.

The company's balance sheet fortification through the $330 million capital raise and $2.15 billion floor plan facility provides flexibility to invest in growth or acquire struggling competitors. Management's commitment to 600-700 basis points of SG&A improvement, supported by AI implementation and location consolidation, could drive mid-cycle EBITDA to $500 million, nearly double current levels.

The primary risks remain the heavy debt burden, supplier dependence, and potential consumer demand weakness. However, the company's ability to source used inventory at scale, its Good Sam membership ecosystem, and its integrated service model create competitive moats that are difficult to replicate.

For investors, the key variables to monitor are used vehicle unit growth, SG&A leverage achievement, and the new vehicle market's response to OEM price increases. If management executes on its cost reduction targets while maintaining market share gains, the current valuation appears to underappreciate the structural improvements in earnings quality and resilience. The transition from Lemonis to Wagner introduces some leadership uncertainty, but Wagner's deep involvement in the operational improvements suggests continuity in strategy execution.