What happened

Shares of Camping World Holdings (NYSE:CWH) traded up more than 9% on Tuesday -- spiking 17% at the open -- after the company received an analyst upgrade. Camping World, a camping and recreational vehicle retailer, has been a volatile stock to own in 2019, but the company finally appears to be gaining some momentum.

So what

Camping World shareholders have had a difficult ride since the company's 2016 IPO, with the shares off nearly 30% since then, but up 93% in the final three months of 2019. The company has been plagued by an industrywide slowdown in RV sales, coupled with company-specific issues including its ill-fated decision to buy the Gander Outdoors brand.

An RV driving on a rural road.

Image source: Getty Images.

Northcoast Research on Tuesday upgraded shares of Camping World, along with RV manufacturer Thor Industries, arguing the worst is over for the sector. Analyst Brandon Rolle set a price target of $20 per share on Camping World, nearly 27% above the current trading price and well above the company's 52-week high.

The vote of confidence seems to be providing a boost to the stock. The price action also has the characteristics of a short squeeze. Camping World has been a battleground stock for bulls and bears in recent years, and according to Yahoo! Finance, as of Dec. 31 about 20% of the company's float was sold short. 

Now what

Worth noting is that Camping World did beat expectations when it announced third-quarter earnings back in November and is working through a restructuring that included closing down underperforming retail locations. If Northcoast is right on a recovery in RV sales, 2020 is shaping up nicely for the company.

But investors should be warned that there was a good reason Camping World shares were so heavily targeted by short sellers. The company has more than $2.8 billion in debt and could run into significant issues if that recovery does not materialize, or if the economy falters.