What Happened?
Shares of recreational vehicle (RV) and boat retailer Camping World (NYSE: CWH) fell 20% in the afternoon session after the company's third-quarter 2025 results, as investors looked past headline beats on revenue and profit to focus on underlying weaknesses in the business. The recreational vehicle retailer reported revenue of $1.81 billion, up 4.7% year-over-year, and an adjusted profit of $0.43 per share, both of which topped Wall Street's expectations. However, the report also highlighted several concerns that likely spooked the market. The company’s free cash flow margin fell sharply to 5.8% from 17.7% in the same quarter last year, and its gross margin missed analyst estimates. Furthermore, investors may have been cautious due to Camping World’s weak balance sheet, which carried significant debt of $2.42 billion against only $230.5 million in cash. The positive headline numbers were not enough to outweigh these deeper operational and financial concerns.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Camping World? Access our full analysis report here.
What Is The Market Telling Us
Camping World’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. But moves this big are rare even for Camping World and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 3% on the news that the latest Consumer Price Index (CPI) report showed inflation at 3.0%, fueling investor optimism for potential interest rate cuts. The CPI, a key measure of inflation, came in slightly lower than consensus forecasts on a month-over-month basis. While the 3.0% annual rate remains above the Federal Reserve's 2.0% target, the market-friendly data prompted a rally, with the S&P 500 and Nasdaq hitting record highs. For consumer-facing industries, moderating inflation and the prospect of lower interest rates are significant tailwinds. These conditions can translate into greater disposable income and improved consumer confidence, encouraging spending on non-essential goods and services. As a result, sectors like retail, travel, and automotive are seeing renewed investor interest, as they are well-positioned to benefit from this potential increase in consumer appetite.
Camping World is down 34.5% since the beginning of the year, and at $13.50 per share, it is trading 46.3% below its 52-week high of $25.14 from November 2024. Investors who bought $1,000 worth of Camping World’s shares 5 years ago would now be looking at an investment worth $502.79.
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