Is Winnebago Stock Worth the Risk?

Winnebago Industries, Inc. (NYSE:WGO) is an American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar, and Barletta brands. WGO products are used primarily in leisure travel and outdoor recreation activities. The company builds motorhomes, travel trailers, fifth-wheel products, pontoons, powerboats, and commercial community outreach vehicles.

On April 18, the outdoor lifestyle company announced a partnership with Make-A-Wish and RV Retailer to provide outdoor activities to children across the United States. The partnership and inaugural program will look to fulfill wishes for children with critical illnesses, per Make-A-Wish's mission statement.

Winnebago stock has decreased about 33% in price year-over-year and WGO is currently trading down 37% since reaching an all-time high of $85.15 last May. Additionally, shares of WGO have dropped in price 29% year-to-date and Winnebago stock is currently up just 5% from their 52-week low of $51.29 reached earlier this month.

Winnebago Industries also offers a dividend yield of 1.36% with a forward dividend of $0.72. Winnebago stock also provides a very intriguing valuation. At a market cap of $1.76 billion, WGO trades at an incredibly low forward price-earnings ratio of 4.97 and a solid price-sales ratio of 0.44. Winnebago is also expected to produce significant growth for fiscal 2022, with estimates indicating a 44% increase in earnings and a 29% increase in revenues.

However, Winnebago’s fundamentals offer very minimal safety for long-term investors. The outdoor lifestyle business holds just $134.83 million in cash and $579.41 million in total debt on their balance sheet. In addition, estimates for fiscal 2023 have WGO dropping earnings by 18.2% and revenues by 6.5%, eating away a good portion of their expected growth for fiscal 2022.