What happened

Shares of Camping World Holdings (NYSE:CWH), a recreational vehicle services company that also recently bought Gander Mountain out of bankruptcy, surged more than 10% in early Thursday trading before settling down to book about an 8.5% gain as of 3:15 p.m. EDT.

So what

Camping World investors can thank investment banker JPMorgan for the boost. This morning, analysts at JP announced they were upgrading Camping World Holdings stock to overweight, based in part on stronger-than-expected recreational vehicle sales. As StreetInsider.com reports today, RV "shipments continue to rise to new all-time highs," and that's good news for Camping World stock.

With RV sales surging, JP predicts "upside" to Camping World's earnings guidance, helped by the "positive impact" of revenue and earnings streams acquired from the Gander Mountain purchase.

RV on road

Image source: Getty Images.

Now what

And a positive impact would be nice to see. After all, Camping World stock has seen its earnings decline year over year in each of the last two quarters. That said, if Camping World can parlay its Gander Mountain purchase into a reversal of that trend, and build further on its core RV business, that would be a very nice turnaround.

Not that Camping World may need to improve much for its stock to be attractive. Valued on its $161 million in GAAP earnings, the stock may look pricey at a P/E ratio of 17.6 and a growth rate hardly above 8%. But there's a world of difference between the GAAP financials that make it onto Camping World's income statement and the cash this business generates, reflected on its cash flow statement.

According to S&P Global Market Intelligence data, Camping World Holdings generated closer to $260 million in positive free cash flow over the past 12 months. Valued on those cash profits, the stock sells for less than 11 times free cash flow. Between its 8.2% expected growth rate, and its 1.1% dividend yield, I can't quite call Camping World stock cheap -- but it certainly doesn't look expensive to me, either.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.