LCI INDUSTRIES (LCII): what the price requires

The current priced-in claim for LCI INDUSTRIES (LCII) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/LCII

Headline

FieldValue
TickerLCII
CompanyLCI INDUSTRIES
Current price$102.38/sh
CompositionTravel trailers and fifth-wheels (OEM) 41% / Motorhomes (OEM) 6% / Adjacent Industries OEMs 30% / Aftermarket Segment 23%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed1.7%
Operating margin today7.9%
Margin compression implied-6.2pp
Multiple paid11x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 8.5% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

ReferenceValue
vs own history-1.20σ
cohort percentile (of 210 peers)16
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.01x5expensive
Earnings1.31x5expensive
Relative0.41x5justifies
Growth0.69x4justifies

Families that justify the price: Asset, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.4%); the inversion above states its own rate.

Per-Model Detail (n=19)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$245.900.42xyesFCF base $0.2B, growth 10% (input: historical growth), terminal g 4.0%, WACC 7.4%, 6yr projection
DCF Exit MultipleGrowth$140.060.73xyesExit EV/EBITDA: 9.3x / 11.3x / 13.3x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$151.210.68xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.7x / 20.0x / 23.3x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowth——no—
Two-Stage DDMGrowth$159.010.64xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$87.551.17xyesBV/sh $55.68, ROE (TTM) 14.5%, ke 9.3%
Two-Stage Excess ReturnAsset$108.550.94xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$85.911.19xyesRev $4.2B, growth 10% (input: historical growth; tapered), Terminal P/S: 0.5x / 0.6x / 0.7x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$285.600.36xyesEPS $8.16, growth 35% (input: historical EPS growth), PEG=0.36 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$77.931.31xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.31B × (1−26%) / WACC 7.4% → EPV (no growth)
Residual IncomeAsset$111.730.92xyesBV $55.68 + 5yr PV of (ROE (TTM) 14.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$101.111.01xyes√(22.5 × EPS $8.16 × BVPS $55.68) — Graham's conservative floor
EV/EBITDA RelativeRelative$124.820.82xyesEBITDA $0.32B × sector EV/EBITDA 13.0x
FCF YieldEarnings$43.432.36xyesFCF $201.5M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$33.423.06xyesSBC-adj FCF $0.18B (FCF $0.20B − SBC $0.02B) capitalized at Kₑ
Ben Graham FormulaEarnings$263.300.39xyesEPS $8.16 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$21.194.83xyesBV $55.68 × (ROIC 2.8% / WACC 7.4%)
P/Sales SectorRelative$250.890.41xyesRevenue $4.17B × sector P/S 1.5x
PEG Fair ValueRelative$306.000.33xyesEPS $8.16 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$88.221.16xyesEPS $8.16 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$802.8m
Net debt / NOPAT (after-tax)3.20x
Net debt / operating income (pre-tax)2.36x
Share count CAGR (buyback)-0.5%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

What the standard read of LCI Industries misses is that it is no longer simply an RV-parts company riding a notoriously boom-and-bust market. The company describes itself as "continuing to expand in adjacent industries and aftermarket channels", and its OEM segment now "services leading OEMs in the RV, transportation, marine, and housing markets". The headline multiple treats LCI as a pure RV cyclical and discounts it accordingly, but the business underneath is becoming a diversified components supplier with a growing recurring-revenue aftermarket. That gap between perception and reality is the opportunity.

The diversification shows up exactly where it should, in the segment splits. In the most recent quarter RV OEM sales fell 4%, the cyclical part doing its cyclical thing, but adjacent-industry OEM grew 17%, transportation 24%, marine 11%, and aftermarket 7%. The aftermarket segment is the structurally attractive piece: every RV and trailer LCI has ever supplied parts into eventually needs replacement components, and that demand persists whether or not new units are shipping. LCI is deliberately leveraging its "established relationships with OEMs" to push into these adjacent markets, which is the cheapest possible growth because it reuses an installed sales and manufacturing base.

The profitability and capital discipline back the case. Operating margin expanded to 8.7% from 7.8% on pricing, sourcing, and cost actions, and net income rose 27% even as the RV market stayed soft. The balance sheet is moderate, net debt under three times operating income, and the share count is roughly flat. A components maker improving margins through a weak RV cycle while growing the non-RV parts of its business is demonstrating that the diversification is real, not a slide-deck aspiration, and the price still values it as if the RV cycle is the whole story.

Bear Case

The methods do not actually disagree much on LCI, and that is the bear's discomfort: nearly all of them say the stock is cheap, which usually means the market sees a risk the models do not. The relative-multiple, forward-growth, and asset methods all land well above the current price, with only the most conservative reads close to it. When a stock trades at a deep discount to almost every method, the conservative reading is rarely that the market is simply wrong; it is that the market is pricing in a deterioration the trailing numbers have not yet captured. For LCI, that deterioration is the RV cycle.

The core exposure remains recreational vehicles, and RV demand is among the most discretionary, interest-rate-sensitive purchases a household makes. The company trimmed its North American RV wholesale shipment outlook to 315,000 to 330,000 units, an acknowledgment that the OEM demand environment is soft. RV OEM sales already fell 4% in the quarter, and if the cycle deepens, the diversification into adjacent industries cushions the blow but does not eliminate it: the RV pieces still carry meaningful fixed costs that hurt when volumes drop. Adjacent industries like transportation and marine are themselves cyclical, just on different clocks, so a broad slowdown would pressure several segments at once.

The valuation question is whether the cheapness is value or a trap. The price works out to about 10 times operating income, below what even a steady annual decline in profit would justify, which is the model saying the assets are worth more than the quote. The bear's counter is that earnings sit on RV demand that could fall further, and a low multiple on temporarily-elevated earnings is not actually cheap. Net debt near 2.7 times operating income is manageable but not negligible, and interest coverage cannot be cleanly computed from the filings, which removes one comfort. The diversification is the right strategy; the open question is whether it matures fast enough to offset the next leg down in RV before the discount becomes deserved.

Valuation

The price is reading LCI as a tired RV cyclical, and the methods say it has overdone it. At today's quote the shares trade around 10 times company-wide operating income, low enough that the price sits below what even a 5%-a-year decline in operating profit would justify. That is a bound rather than a precise solve: the market is pricing in some erosion, and the question is whether the actual path is better than that pessimistic assumption. The company-wide read frames it as a value and asset-supported name, not a growth bet.

The disagreement among methods points the same way. The forward-growth and relative-multiple methods land well above the current price, the asset-and-profitability methods reach above it too, and only the most conservative reads sit near the quote. There is no overvaluation gap here; the spread is entirely on the cheap side, which makes this a value read where the catalyst is the RV cycle stabilizing and the diversification continuing rather than any change in how the market multiples the business. The risk the low multiple encodes is cyclicality, not quality: the segment mix is shifting toward the steadier aftermarket and adjacent industries, and if that mix shift holds, the discount looks unwarranted.

Solvency is adequate and bounds the downside reasonably. Net debt sits at about 2.7 times operating income, with the caveat that interest expense is not separately reported, so coverage cannot be computed cleanly from the filings. Liquid assets are modest against the debt, so this is not a fortress balance sheet, but it is far from stretched for a profitable manufacturer. The share count is roughly flat, and margins are expanding through a soft RV market. The genuine downside variable is not the balance sheet but RV wholesale shipments, which management has guided lower; the price already assumes that softness, and the methods suggest it assumes too much of it.

Catalysts

The first quarter of 2026 was a diversification-over-RV print. Net sales grew 4.3% to $1.09 billion and net income rose 27% to $62.9 million, with operating margin expanding to 8.7% from 7.8% on pricing, sourcing, and cost initiatives. The segment detail told the story: RV OEM sales fell 4%, but adjacent-industry OEM grew 17%, transportation 24%, marine 11%, and the aftermarket segment rose 7% to $237.7 million.

Management raised its full-year outlook on the parts it controls while acknowledging the parts it does not. It now expects 2026 revenue of $4.2 to $4.3 billion and raised the low end of its adjusted earnings guidance, while trimming its North American RV wholesale shipment outlook to 315,000 to 330,000 units. The 2025 acquisitions are part of the push toward a less purely RV-driven revenue base.

The near-term watch items are the RV wholesale shipment trend, the cleanest read on the cyclical exposure, and the continued growth of adjacent industries and aftermarket, the read on whether the diversification is offsetting it. Margin progress on pricing and sourcing is the third signal that the company can earn more per dollar of sales even while RV volumes stay soft.

Peer Cohorts (Per Segment, With Filing Citations)

OEM (reported)

Aftermarket (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

LCI Industries Q1 2026 earnings release, May 2026

View the full interactive LCII report on boothcheck