Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with REV Group (REVG) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [2][9]. Earnings Growth - REV Group has a historical EPS growth rate of 32.6%, with projected EPS growth of 32.2% for the current year, significantly outperforming the industry average of -2.6% [4]. Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 53.9%, which is substantially higher than the industry average of -19.8% [5]. - Over the past 3-5 years, REV Group's annualized cash flow growth rate has been 27.3%, compared to the industry average of 4.8% [6]. Earnings Estimate Revisions - The current-year earnings estimates for REV Group have been revised upward, with the Zacks Consensus Estimate increasing by 1.5% over the past month [7]. Overall Positioning - REV Group holds a Zacks Rank of 2 (Buy) and a Growth Score of A, indicating strong potential for outperformance in the growth stock category [9].

Group 1 - REV Group (REVG) has shown a year-to-date return of approximately 87.4%, significantly outperforming the Auto-Tires-Trucks sector average return of 12.7% [4] - The Zacks Rank for REV Group is currently 2 (Buy), indicating a positive earnings outlook with a 0.5% increase in the consensus estimate for full-year earnings over the past quarter [3] - REV Group is part of the Automotive - Domestic industry, which has gained an average of 14.8% this year, further highlighting its strong performance relative to its peers [5] Group 2 - Standard Motor Products (SMP), another stock in the Auto-Tires-Trucks sector, has a year-to-date return of 24.4% and also holds a Zacks Rank of 2 (Buy) [4][5] - The Automotive - Replacement Parts industry, to which SMP belongs, has experienced a decline of -11.2% year to date, contrasting with the performance of REV Group [6]

Core Insights - The U.S. stock indices showed positive performance on December 11, 2025, with the S&P 500 and Dow Jones Industrial Average reaching new closing records following a quarter-point interest rate cut by the U.S. central bank on December 10, leading investors to favor equities sensitive to rate cuts over tech stocks [1][2]. Investment Recommendations - Investors are advised to consider low-leverage stocks as safe-haven securities amid concerns over overvalued AI-centric tech stocks. Recommended companies include Casey's General Stores (CASY), Hamilton Insurance Group (HG), Northrip Bancorp (NRIM), REV Group (REVG), and Engie (ENGIY), which exhibit low leverage and stability during market volatility [2][10]. Understanding Leverage - Leverage involves borrowing capital for operational and business expansion, typically through debt financing. While debt can facilitate growth, excessive reliance on it poses risks, especially if returns do not exceed interest costs. Therefore, selecting companies with low debt is crucial for minimizing investment risks [4][5][6]. Debt-to-Equity Ratio Analysis - The debt-to-equity ratio is a key metric for assessing a company's financial risk, with lower ratios indicating better solvency. As the third-quarter 2025 earnings season concludes, investors should focus on stocks with solid earnings growth and low debt-to-equity ratios to ensure steady returns [7][9]. Stock Selection Criteria - A comprehensive screening process for selecting low-leverage stocks includes criteria such as: - Debt/Equity ratio lower than the industry median - Current price of at least $10 - Average 20-day trading volume of 50,000 or more - Positive earnings growth compared to the industry median - VGM Score of A or B, combined with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [11][12][13]. Company Performance Highlights - **Casey's General Stores (CASY)**: Reported a 3.3% increase in same-store sales and a 14% rise in earnings for Q2 fiscal 2026. The Zacks Consensus Estimate predicts a 9.6% revenue increase and an 11.8% earnings improvement for fiscal 2026, with a Zacks Rank of 2 [14][15]. - **Hamilton Insurance Group (HG)**: Achieved a 16.5% increase in net premiums and improved operating earnings to $1.20 per share from $0.16 in Q3 2024. The Zacks Consensus Estimate forecasts a 20.9% revenue increase and an 8.5% earnings rise for 2025, holding a Zacks Rank of 1 [16][17]. - **Northrip Bancorp (NRIM)**: Completed a $60 million private placement to support growth initiatives. The Zacks Consensus Estimate anticipates a 29.6% revenue increase and a 51.5% earnings rise for 2025, with a Zacks Rank of 1 [18][19]. - **REV Group (REVG)**: Reported a 13% increase in net sales and a 62.7% rise in adjusted EPS for Q4 fiscal 2025. The Zacks Consensus Estimate suggests a 7.3% revenue increase and a 30.4% earnings rise for fiscal 2026, with a Zacks Rank of 2 [20][21]. - **Engie (ENGIY)**: Announced the financial closure of its first offshore wind farm in Poland, with a total planned capacity of up to 390 MW. The Zacks Consensus Estimate indicates a 31.8% earnings improvement for 2025, holding a Zacks Rank of 2 [22][23].

Core Insights - REV Group, Inc. (REVG) experienced a price fluctuation, dropping to $48 before recovering to $58, indicating robust performance despite market uncertainties [1] Company Performance - The stock price of REV Group, Inc. has shown resilience, bouncing back after a decline, which reflects the company's strong operational performance [1] Market Context - The current market environment presents both uncertainties and opportunities, suggesting a complex landscape for investors [1] Analyst Background - The analyst has nearly two decades of experience in the logistics sector and focuses on stock investing and macroeconomic analysis, particularly in ASEAN and NYSE/NASDAQ stocks [1]

Core Insights - REV Group, Inc. reported an earnings per share (EPS) of $0.83, exceeding the estimated $0.78, indicating strong financial performance [2][6] - The company's consolidated net sales for the fourth quarter reached $664.4 million, surpassing both the estimated $646.8 million and the previous year's sales of $597.9 million [2][3][6] - The growth in sales reflects REV Group's ability to expand its market presence and deliver value to stakeholders [3] Financial Metrics - The price-to-earnings (P/E) ratio is approximately 28.36, indicating the price investors are willing to pay for each dollar of earnings [4][6] - The price-to-sales ratio stands at about 1.10, suggesting investor confidence in the company's revenue-generating capabilities [4] - The enterprise value to sales ratio is approximately 1.11, and the enterprise value to operating cash flow ratio is around 11.76, reflecting the company's valuation relative to its sales and cash flow [5] - The debt-to-equity ratio is about 0.13, indicating a relatively low level of debt compared to equity, which suggests financial stability [5][6] - The current ratio of approximately 1.51 indicates good liquidity to cover short-term liabilities, ensuring operational efficiency [5]

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Financial Data and Key Metrics Changes - Full year 2025 consolidated net sales reached $2.46 billion, an increase of $83 million, or 3.5%, compared to the prior year. Adjusting for the exit of bus manufacturing, net sales increased by $247 million, or 11.1% year over year [13][14] - Full year consolidated Adjusted EBITDA was $229.5 million, an increase of $66.7 million, or 41%, year over year. Adjusted for exited bus manufacturing earnings, Adjusted EBITDA increased by $84.3 million, or 58.1% [14] - Fourth quarter consolidated Adjusted EBITDA margin of 10.5% exceeded the low end of the 10%-12% target range for fiscal year 2027 [15] Business Line Data and Key Metrics Changes - Specialty vehicle segment sales for the fourth quarter were $507.4 million, an increase of $67.5 million compared to the prior year. Excluding bus manufacturing, net sales increased by $77.3 million, or 18% [16] - Specialty vehicle segment Adjusted EBITDA of $70.5 million increased by $20.3 million, with a margin of 13.9%, representing a 220 basis point improvement year over year [17] - Recreational vehicle segment sales were approximately flat at $157 million, with Adjusted EBITDA of $9 million, an increase of $900,000 versus the prior year [19] Market Data and Key Metrics Changes - Specialty vehicle segment backlog increased to $4.4 billion, reflecting strong demand for fire and emergency vehicles, with a book-to-bill ratio greater than one [17][18] - Recreational vehicle segment backlog was $233 million at year-end, a 20% decline versus the prior year, indicating a challenging retail environment [20] Company Strategy and Development Direction - The merger with Terex Corporation is viewed as a unique opportunity to create meaningful value for shareholders, with a focus on operational synergies and product innovation [4][5] - Investments are being made to enhance efficiency, expand capacity, and modernize facilities, aimed at achieving industry-leading performance in quality and lead time [10][11] Management's Comments on Operating Environment and Future Outlook - Management remains encouraged by order rates and strong demand, despite not providing guidance for fiscal year 2026 due to the pending merger [27] - The specialty vehicle market is expected to normalize, driven by strong municipal tax budgets and secular tailwinds [42][43] Other Important Information - The company returned approximately $121 million to shareholders through share repurchases and dividends during the year [13] - Trade working capital decreased to $161.3 million, primarily due to disciplined inventory management [21] Q&A Session Summary Question: Insights on specialty orders and pricing - Management noted strong order rates and a backlog holding steady, but refrained from providing specific pricing guidance for 2026 [26][27] Question: Market share and customer behavior shifts due to tariffs - Management indicated no material competitive advantage or disadvantage due to tariffs, as most competitors have similar cost structures [28][29] Question: Efficiency gains in specialty vehicles - Management described the efficiency improvement process as being in the middle innings, with more potential for operational enhancements [35][36] Question: Demand breakdown by RV class - Demand remains lumpy for Class A units, while Class C units are performing well, with Class B units facing challenges [37] Question: Investment opportunities within the network - Management highlighted targeted investments in automation and specific facilities to enhance throughput and efficiency [40][41] Question: Demand cycle within the specialty vehicle segment - Management noted strong secular tailwinds in the fire and emergency markets, with expectations for normalization in demand [42][43]

Financial Data and Key Metrics Changes - For fiscal year 2025, consolidated net sales reached $2.46 billion, an increase of $83 million, or 3.5%, compared to the prior year. Adjusting for the exit of bus manufacturing, net sales increased by $247 million, or 11.1% year over year [12][13] - Full year consolidated Adjusted EBITDA was $229.5 million, an increase of $66.7 million, or 41%, year over year. Adjusted for earnings related to exited bus manufacturing, Adjusted EBITDA increased by $84.3 million, or 58.1% [14] - Fourth quarter consolidated Adjusted EBITDA margin was 10.5%, exceeding the low end of the 10%-12% target range for fiscal year 2027 [15] Business Line Data and Key Metrics Changes - Specialty vehicle segment sales for the fourth quarter were $507.4 million, an increase of $67.5 million compared to the prior year. Excluding bus manufacturing, net sales increased by $77.3 million, or 18% [16] - Adjusted EBITDA for the specialty vehicle segment was $70.5 million, an increase of $20.3 million. The segment achieved an Adjusted EBITDA margin of 13.9% in the fourth quarter, representing a 220 basis point improvement year over year [17] - Recreational vehicle segment sales were approximately flat at $157 million, with Adjusted EBITDA of $9 million, an increase of $900,000 versus the prior year [19] Market Data and Key Metrics Changes - Specialty vehicle segment backlog was $4.4 billion, reflecting a 5.3% increase versus the prior year, indicating strong demand for fire and emergency vehicles [17] - Recreational vehicle segment backlog was $233 million at year-end, a 20% decline versus the prior year, reflecting a challenging retail environment [19] Company Strategy and Development Direction - The merger with Terex Corporation is viewed as a unique opportunity to create meaningful value for shareholders, with plans to leverage combined scale and operational efficiencies [5][8] - The company is focused on operational improvements, including increased throughput and shipments, and disciplined cost management to enhance efficiency and reduce production gaps [9][10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational improvements and the ability to reinvest in the business, with a focus on enhancing production capabilities and maintaining operational excellence [11][12] - The company is not providing guidance for fiscal year 2026 due to the pending merger, but remains optimistic about the current demand and operational momentum [3][23] Other Important Information - The company returned approximately $121 million to shareholders through share repurchases and dividends during the year, balancing investments in growth with shareholder returns [12] - Trade working capital decreased to $161.3 million, primarily due to disciplined inventory management [21] Q&A Session Summary Question: Insights on specialty orders and pricing - Management noted strong order rates and a backlog holding steady, but did not provide specific guidance for 2026 [24] Question: Impact of tariffs on customer behavior and market share - Management indicated that there has not been a significant competitive advantage or disadvantage due to tariffs, as most competitors have similar cost structures [25] Question: Efficiency gains in specialty vehicle segment - Management described the company as being in the middle innings of efficiency improvements, with more potential for operational enhancements [27] Question: Demand breakdown by RV class - Demand remains lumpy for Class A units, while Class C units are performing well, with ongoing challenges in the Class B market [28] Question: Opportunities for investment in capacity - Management highlighted targeted investments in automation and specific facilities to increase throughput and efficiency [29] Question: Demand cycle normalization in specialty vehicles - Management noted strong secular tailwinds in the fire and emergency markets, with expectations for normalization to continue [31]

Core Insights - REV Group reported revenue of $664.4 million for the quarter ended October 2025, marking an 11.1% increase year-over-year and exceeding the Zacks Consensus Estimate of $647.12 million by 2.67% [1] - The company's EPS for the quarter was $0.83, up from $0.51 in the same quarter last year, and also surpassed the consensus EPS estimate of $0.78 by 6.41% [1] Revenue Performance - Net Sales for Recreation Vehicles were $157.2 million, slightly below the average estimate of $159.69 million, reflecting a year-over-year decrease of 0.6% [4] - Net Sales for Specialty Vehicles reached $507.4 million, exceeding the average estimate of $487.48 million, with a year-over-year increase of 15.3% [4] - Corporate & Other reported net sales of $-0.2 million, compared to the average estimate of $-0.1 million, indicating a 100% year-over-year change [4] EBITDA Metrics - Adjusted EBITDA for Recreation Vehicles was $9 million, surpassing the average estimate of $7.14 million [4] - Adjusted EBITDA for Specialty Vehicles was $70.5 million, exceeding the average estimate of $65.06 million [4] - Adjusted EBITDA for Corporate & Other was $-9.8 million, slightly worse than the average estimate of $-9.62 million [4] Stock Performance - REV Group's shares have returned +8.2% over the past month, outperforming the Zacks S&P 500 composite's +1.8% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

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