If you’re wondering if profits are the sole motivator of the RV industry’s headlong rush to build as many RVs as possible this year … well, of course that’s the reason. But a recent article by Demitri Kalogeropoulos in The Motley Fool stock guidance and research service pointed out a few additional insights.
In a story about Thor Industries and the recent ups and downs with its stock price, The Motley Fool noted that Thor’s stock has been up as high as 60 percent this year before “evaporating” in recent months.
The Motley Fool writer Kalogeropoulos said the biggest question investors are asking Thor is how well it and fellow manufacturers like Winnebago Industries can handle the historic supply and inventory challenges.
How much backlog are we talking about?
Thor’s order backlog climbed again last month and now sits at about $18.5 billion. Thor said in September that there was no sign of future slowdowns. That backlog amount would surpass Thor’s total revenues for the previous year. Winnebago is also reporting a backlog in the double-digit billions.
The investor questions come as that humongous backlog order cruises into the future. Backlog orders can be canceled, and if Thor and Winnebago both leave potential buyers waiting too long, those orders and the money that comes with them might be gone with the wind.
Investors want to see Thor make some progress on closing the gap on backorders and turning those “maybe” sales into real numbers for the bottom line.
As The Motley Fool noted, the factor above might be the best explanation for the industry’s all-out push to make as many rigs as they can – right away. Watching the backorder number continue to grow won’t make investors happier.
Thor and Winnebago need to close the gap if they want their stock prices to keep growing, and that means cranking out a lot more RVs as fast as they can.