Is Camping World (CWH) a Buy After Strong Q2 Earnings Amid RV Market Volatility?

In the shadow of a historically cyclical industry, Camping World Holdings (CWH) has delivered a Q2 2025 earnings report that turns heads—and raises critical questions for investors. With revenue surging 9.4% to $2.0 billion and adjusted EBITDA climbing 34.7% to $142.2 million, the company has navigated a volatile RV market with a blend of volume growth, margin discipline, and strategic agility. But in an industry prone to booms and busts, can these gains hold? Let's dissect the numbers, the strategy, and the risks to determine whether CWH is a compelling buy.

Sustainable Revenue Growth: Volume Over Price

Camping World's Q2 results were driven by a 20.7% surge in combined new and used RV unit sales to 45,602 units. While average selling prices (ASPs) for new vehicles fell 10.6%, the sheer volume of sales offset this pressure. Same-store new and used unit sales grew 22.2% and 20.8%, respectively, underscoring the company's ability to capture market share through competitive pricing and inventory availability.

This volume-driven model is a double-edged sword. On one hand, it aligns with Camping World's long-term strategy to expand the RV industry's total addressable market by targeting younger, affordability-conscious buyers. Smaller, lighter units and peer-to-peer platforms like rvs.com are democratizing access to RV ownership. On the other hand, the reliance on volume growth raises concerns: Can Camping World sustain these sales rates if macroeconomic conditions deteriorate or if the used RV market cools?

Margin Resilience: A Tale of Two Segments

The company's margin performance was mixed but revealing. New vehicle gross margin dipped 149 basis points to 13.8%, hurt by falling ASPs and higher roadside assistance costs. However, used vehicle gross margin improved 149 basis points to 20.5%, driven by lower average costs per unit and the divestiture of the low-margin RV furniture business.

The products, service, and other revenue segment, though down 5.5% year-over-year, saw a dramatic 411-basis-point margin improvement to 47.8%. This highlights Camping World's ability to leverage its service and aftermarket ecosystem—such as parts, maintenance, and the Good Sam membership club—to bolster profitability.

Critically, the company's SG&A expenses rose 4.2% to $437.5 million, but floor plan interest expenses dropped 24.5% to $21.0 million, a tailwind from lower interest rates and reduced debt. This suggests Camping World is managing fixed costs effectively while benefiting from favorable financing conditions.

Long-Term Strategic Positioning: Navigating Cyclicality

Camping World's strategic moves are designed to insulate it from the RV industry's inherent volatility. The company's focus on the used RV market is particularly noteworthy. With used unit sales up 19.0% and market share climbing to 9%, Camping World is capitalizing on a trend: consumers trading down to more affordable options. The company's data-driven pricing models and centralized procurement in Arizona give it a competitive edge in this segment.

Moreover, the One Big Beautiful Bill Act—a tax provision allowing immediate floorplan interest deductions for travel trailers and fifth wheels—is projected to save Camping World $15–$20 million annually in 2025. These savings will be reinvested in debt reduction, further strengthening the balance sheet.

Camping World is also redefining its cost structure. A 900-employee reduction and the consolidation of 16 stores to 201 locations signal a shift toward leaner operations. This contrasts with competitors like Thor Industries and Winnebago, which have focused more on electrification and luxury offerings. While Camping World isn't leading the EV charge, its affordability-centric model is resonating in a market where price sensitivity is rising.

Macro Risks and Competitive Pressures

The RV industry's cyclicality remains a wildcard. While Camping World's Q2 performance was strong, the broader market faces headwinds. High interest rates and inflation have historically dampened demand, and while forecasts for 2025 are cautiously optimistic, any reversal could test Camping World's resilience.

Competition is also heating up. Thor Industries, the industry leader, is expanding its hybrid and electric RV offerings, while startups like Lightship and Grounded are disrupting the market with EVs. Camping World's reliance on affordability could become a liability if consumers prioritize quality and innovation over price.

Additionally, the company's SG&A expenses, though stable, remain a concern. A 4.2% year-over-year increase in these costs suggests that Camping World's cost-cutting efforts may need to accelerate to maintain margin expansion.

Investment Thesis: Buy with Caution

Camping World's Q2 results are undeniably strong, with revenue, EBITDA, and EPS all outperforming expectations. The company's focus on volume growth, used RV dominance, and cost discipline positions it well for the current market environment. However, investors must weigh these positives against the industry's cyclicality and Camping World's lack of differentiation in high-growth areas like electrification.

For a buy recommendation, Camping World must demonstrate that its margin improvements are structural, not temporary. The company's projected $500 million in adjusted EBITDA by 2025, coupled with a 100-basis-point gross margin expansion target, suggests optimism. Yet, the stock's valuation—trading at a 15x multiple to its 2025 EBITDA guidance—appears stretched compared to peers like Thor Industries (12x) and Winnebago (13x).

Final Verdict: Camping World is a conditional buy for investors who believe in its ability to sustain volume growth and execute its cost-cutting and debt-reduction plans. However, the stock carries elevated risk due to macroeconomic volatility and competitive pressures. For a more conservative approach, consider a “watch and wait” strategy until the industry's trajectory becomes clearer.

In a cyclical industry, Camping World has shown it can adapt—but whether it can outperform in the long term will depend on its ability to innovate beyond affordability and navigate the next downturn.