Shares of REV Group (REVG) have been strong performers lately, with the stock up 16.9% over the past month. The stock hit a new 52-week high of $63.78 in the previous session. REV Group has gained 96.9% since the start of the year compared to the -6.3% gain for the Zacks Transportation sector and the 1.1% return for the Zacks Transportation - Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on September 3, 2025, REV Group reported EPS of $0.79 versus consensus estimate of $0.63 while it beat the consensus revenue estimate by 5%.
For the current fiscal year, REV Group is expected to post earnings of $2.58 per share on $2.45 in revenues. This represents a 62.26% change in EPS on a 2.76% change in revenues. For the next fiscal year, the company is expected to earn $3.5 per share on $2.61 in revenues. This represents a year-over-year change of 35.85% and 6.58%, respectively.
Valuation Metrics
While REV Group has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
REV Group has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 24.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 22.1X. On a trailing cash flow basis, the stock currently trades at 32.7X versus its peer group's average of 7.6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, REV Group currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if REV Group fits the bill. Thus, it seems as though REV Group shares could have potential in the weeks and months to come.
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REV Group, Inc. (REVG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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