Since April 2025, Winnebago has been in a holding pattern, floating around $31.29. The stock also fell short of the S&P 500’s 27.9% gain during that period.

Is there a buying opportunity in Winnebago, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free for active Edge members.

Why Do We Think Winnebago Will Underperform?

We're swiping left on Winnebago for now. Here are three reasons there are better opportunities than WGO and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Winnebago’s sales grew at a tepid 5% compounded annual growth rate over the last five years. This was below our standard for the industrials sector.

2. New Investments Fail to Bear Fruit as ROIC Declines

A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Winnebago’s ROIC has decreased significantly over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.

3. Short Cash Runway Exposes Shareholders to Potential Dilution

As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.

Winnebago burned through $52.2 million of cash over the last year, and its $764.7 million of debt exceeds the $10.5 million of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble.

Unless the Winnebago’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns.

We remain cautious of Winnebago until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet.

Final Judgment

Winnebago falls short of our quality standards. With its shares underperforming the market lately, the stock trades at 15× forward P/E (or $31.29 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. There are better investments elsewhere. We’d suggest looking at one of our top digital advertising picks.

Stocks We Would Buy Instead of Winnebago

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