LCI Industries (LCII): A Bull Case Theory

Ricardo Pillai

Mon, Jul 14, 2025, 11:28 AM 3 min read

We came across a bullish thesis on LCI Industries on Valueinvestorsclub.com’s Substack by vincent975. In this article, we will summarize the bulls’ thesis on LCII. LCI Industries's share was trading at $99.12 as of July 2^nd. LCII’s trailing and forward P/E were 16.25 and 18.55 respectively according to Yahoo Finance.

A motorhome parked in view of a mountain range, reflecting the joy of the open road.

LCI Industries (LCII) appears undervalued at ~10x free cash flow, reflecting investor concerns around macroeconomic weakness, tariffs, and softness in the RV and marine sectors. However, this creates a compelling entry point, as LCII operates below mid-cycle volumes and should benefit from an eventual recovery.

As a key supplier rather than an OEM, LCII enjoys a durable market position driven by product breadth, customer proximity, and superior service—advantages that create barriers to entry and support long-term share gains. The company expects 3%-5% organic growth from increased product content, alongside 25% incremental margins on rising volumes. Current RV and marine shipments remain well below historical averages, offering upside potential as demand normalizes.

LCII is also poised to benefit from a mix of shifts toward higher-content motorhomes and growth in aftermarket sales, particularly as warranty periods lapse on the millions of RVs sold during the COVID-19 boom. A partnership with Camping World to expand aftermarket distribution further strengthens this segment. LCII targets $5 billion in organic revenue by 2027 and double-digit EBITDA margins, translating into over $12/share in free cash flow, excluding M&A.

Management’s disciplined capital allocation, demonstrated through recent bus market acquisitions and a new $300 million buyback, complements its 5% dividend yield. Tariff risks remain, but mitigation strategies—such as shifting supply chains and passing costs to customers—should soften the blow. Even in a bearish scenario, LCII’s FCF yield provides a margin of safety. With RV industry recovery, share buybacks, and tariff mitigation as catalysts, LCII offers an attractive risk/reward profile for long-term investors.

Previously, we covered a bullish thesis on Harley-Davidson, Inc. (HOG) by Business Model Mastery in May 2025, which highlighted the company’s strong brand equity, vertically integrated operations, and high-margin aftermarket and financing ecosystem. The company’s stock price has appreciated by approximately 2.9% since our coverage. This is because the thesis played out as aftermarket sales and financing growth supported margins. Vincent975 shares a similar investment framework but emphasizes on the RV and marine supplier space with LCII, where he sees a similarly underappreciated aftermarket and recurring revenue opportunity.