NEW YORK (TheStreet) -- Winnebago Industries (WGO) - Get Report shares are up 7.34% to $22.22 in early market trading on Thursday following the release of the recreation vehicle manufacturer's third quarter earnings results before the opening bell today.

The Forest City, IA-based company earned $11.5 million, or 44 cents per share on an adjusted basis, beating analysts' earnings expectations of 42 cents per share by one cent.

Revenue for the period increased 7.6% year over year to $266.5 million, also topping analysts' $261.38 million guidance.

The company's revenue beat was driven by an 11.4% year over year increase in motorhome shipments.

Americans are expected to purchase about 380,000 recreational vehicles this year, a 6.5% increase over the previous year and the most since 2007, according to Reuters.

TheStreet Ratings team rates WINNEBAGO INDUSTRIES as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate WINNEBAGO INDUSTRIES (WGO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WGO's revenue growth has slightly outpaced the industry average of 6.9%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • WGO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to -$14.43 million or 18.17% when compared to the same quarter last year. Despite an increase in cash flow, WINNEBAGO INDUSTRIES's average is still marginally south of the industry average growth rate of 23.55%.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Automobiles industry and the overall market, WINNEBAGO INDUSTRIES's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • WINNEBAGO INDUSTRIES's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WINNEBAGO INDUSTRIES increased its bottom line by earning $1.65 versus $1.13 in the prior year. For the next year, the market is expecting a contraction of 4.2% in earnings ($1.58 versus $1.65).
  • You can view the full analysis from the report here: WGO Ratings Report