REV Group Inc (NYSE:REVG) – A GARP Candidate Worth Considering

REV Group Inc (NYSE:REVG) surfaced in our Peter Lynch-inspired screen as a potential candidate for long-term investors seeking growth at a reasonable price. The company, which designs and manufactures specialty vehicles, meets several key criteria for sustainable growth and sound financial health.

Why REVG Fits the GARP Approach

• Strong Earnings Growth: REVG has delivered an impressive 29.4% average annual EPS growth over the past five years, comfortably within Lynch’s preferred 15-30% range. This signals consistent profitability without excessive expansion.
• Attractive Valuation: With a PEG ratio of 0.71 (well below Lynch’s threshold of 1), the stock appears undervalued relative to its growth prospects.
• Healthy Balance Sheet: A debt-to-equity ratio of 0.33 indicates conservative leverage, aligning with Lynch’s preference for financially stable companies. The current ratio of 1.93 further confirms solid liquidity.
• High Profitability: A return on equity (ROE) of 21.7% demonstrates efficient use of shareholder capital, surpassing most industry peers.

Fundamental Snapshot

REVG holds a mid-range fundamental rating of 6/10, reflecting balanced scores in profitability, valuation, and financial health. While its gross margins lag behind competitors, improving operating margins and a strong ROIC (12.1%) suggest operational efficiency gains. Analysts project a 33.8% annual EPS growth in coming years, reinforcing its growth trajectory.

For a deeper dive, review the full fundamental analysis here.

Our Peter Lynch Strategy screener updates daily with more stocks matching these criteria.

Disclaimer

This is not investing advice. Always conduct your own research before making investment decisions.