BRIIDGE Analytics

This week on BRIIDGE Recaps

11 JULY 2024

From Boom to Bust: How the Pandemic Reshaped the Recreational Vehicle Market

Due to sudden and extreme shifts in consumer patterns, the COVID-19 pandemic disproportionately impacted various industries, leading to occasional boom-bust cycles.

The Recreational Vehicle (RV) industry, in particular, outperformed the reference sector (Consumer Cyclical) and the broader market from the pandemic low into Q1 2021.

It achieved a positive spread exceeding 100% and 150%, respectively, against the reference sector and the market over this period.


Fig 1: Performance 1YR Horizon

BRIIDGE Shortcut: TS Reference Index


Fig 2: Sales Growth [1YR Rolling]

BRIIDGE Shortcut: BRIIDGE FA | BRIIDGE CUSTOM FA


Since then, however, the industry’s performance has been sluggish. It has experienced a negative lag exceeding 70% against the benchmark, although its performance has been in line with the broader sector.

In early 2021, faced with restricted travel alternatives, stringent health policies in crowded areas, and the rise of remote work, some consumers opted for recreational vehicles for family vacations, while others chose them as year-round mobile domiciles.


This surge in demand created a strain on production capacity. Supply chain issues led to delays, price surges, and eventually excess inventories.

As demand subsequently cooled with the progressive phase-out of remote/hybrid work culture and skyrocketing interest rates limiting financing options for prospective buyers, sales figures deteriorated.


Fig 3: Operating Margin [1YR Rolling]

BRIIDGE Shortcut: BRIIDGE FA | BRIIDGE CUSTOM FA


Fig 4: Free-Cash-Flow To Sales [1YR Rolling]

BRIIDGE Shortcut: BRIIDGE FA | BRIIDGE CUSTOM FA


While the Consumer Cyclical sector holds steady, the RV industry's sales growth turned negative for the four quarters ending Q1, with a comparison of +2.2% for the sector versus -16% for the industry.

The reliance on low interest rates is significant not only at the consumer level, due to financing requirements, but also at the corporate level, with a median debt-to-equity ratio exceeding 1.





Analysis In Graphs:



Fig 5: Net Income Margin [1YR Rolling]

BRIIDGE Shortcut: BRIIDGE FA | BRIIDGE CUSTOM FA


Fig 6: Performance [1YR]

BRIIDGE Shortcut: TS Reference Index






Fig 7: Dividend Yield

BRIIDGE Shortcut: BRIIDGE FA | BRIIDGE CUSTOM FA


Fig 8: Net Debt To Ebitda [1YR Rolling]

BRIIDGE Shortcut: BRIIDGE FA | BRIIDGE CUSTOM FA




DEPRESSED VALUATION LEVELS, CYCLICAL NATURE, HIGH DEBT BURDEN