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Thor Industries (THO) Up 3.5% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Thor Industries (THO - Free Report) . Shares have added about 3.5% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Thor Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Thor Puts Up A Stellar Q2 Show

Thor reported second-quarter fiscal 2021 (ended Jan 31, 2021) adjusted earnings of $2.38 per share, which beat the Zacks Consensus Estimate of $1.60. This outperformance can be attributed to higher-than-anticipated revenues across all its segments. The bottom line also jumped 357.6% from the year-ago profit of 52 cents per share.

Thor registered revenues of $2,727.8 million for the quarter under review, topping the Zacks Consensus Estimate of $2,548 million. Moreover, the top line recorded a 36.2% year-over-year increase.

As of Jan 31, 2021, Thor had cash and cash equivalents of $186.5 million and a long-term debt of $1,821.5 million. Consolidated backlog totaled $10.81 billion at quarter-end, representing a 280% jump from the year-ago period.

Segmental Results

North American Towable RVs: Revenues from the segment came in at $1,373 million, up 39.6% year over year on the back of robust shipments and benefits from the Tiffin Group buyout. The top line also surpassed the Zacks Consensus Estimate of $1,272 million. Pretax profit totaled $147.9 million, up from $53.4 million recorded in the year-ago period, thanks to higher sales and improved gross profit margins. At quarter-end, total backlog of the unit was $5.25 billion, which skyrocketed 454.1% from the year-ago period.

North American Motorized RVs: Revenues from the segment totaled $577 million, which reflected year-over-year growth of 67.9% on the back of higher unit sales, and favorable product and price mix. The top line also outpaced the consensus mark of $416 million. Pretax profit came in at $43.4 million, up from $14.9 million recorded in the year-ago period. Backlog in the segment summed $2.92 billion, up a whopping 271.8% from the year-ago period.

European RVs: Revenues from the segment came in at $733.5 million, up 15.1% from the year-ago period driven by higher unit shipments, favorable product mix and forex translations. The top line also beat the consensus mark of $660 million. The segment incurred a net profit of $10.2 million, higher than the year-ago level of $4.7 million backed by higher sales, and lower labor and warranty costs. Backlog of the segment was $2.64 as of Jan 31, depicting year-over-year growth of 131.5%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 24.83% due to these changes.

VGM Scores

Currently, Thor Industries has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Thor Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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