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Why Is Thor Industries (THO) Down 3.8% Since Last Earnings Report?

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It has been about a month since the last earnings report for Thor Industries (THO - Free Report) . Shares have lost about 3.8% in that time frame, underperforming the S&P 500.

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

Thor Puts Up A Stellar Q3 Show

Thor reported third-quarter fiscal 2021 (ended Apr 30, 2021) adjusted earnings of $3.29 per share, which beat the Zacks Consensus Estimate of $2.36. This outperformance can be attributed to higher-than-anticipated revenues across all its segments. The bottom line also skyrocketed 665.1% from the year-ago profit of 43 cents per share.

This RV maker registered revenues of $3,459.3 million for the quarter under review, topping the Zacks Consensus Estimate of $3,020 million. Moreover, the top line recorded a 105.7% year-over-year increase.

As of Apr 30, 2021, Thor had cash and cash equivalents of $297.5 million and a long-term debt of $1,718.1 million. Consolidated backlog totaled $14.32 billion at quarter-end, representing a 550% jump from the year-ago period.

Segmental Results

North American Towable RVs: Revenues from the segment came in at $1,730 million, surging 123.7% 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 $1,427 million. Pretax profit totaled $167.7 million, up from $49.3 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 $7.43 billion, skyrocketing from $857.9 million as of Apr 30, 2020.

North American Motorized RVs: Revenues from the segment totaled $775.4 million, which reflected year-over-year growth of 193.7%, thanks to higher unit sales and the Tiffin Group buyout benefits. The top line also outpaced the consensus mark of $706 million. Pretax profit came in at $54.8 million, up from $10.9 million recorded in the year-ago period. Backlog in the segment summed $3.55 billion, jumping from $548 million as of Apr 30, 2020.

European RVs: Revenues from the segment came in at $894.2 million, up 45.3% 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 $812 million. The segment incurred a net profit of $44 million versus net loss of $0.2 million in the year-ago period. Backlog of the segment was $3.34 billion as of Apr 30, jumping from $803.5 million recorded on Apr 30, 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Thor Industries has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

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

Outlook

Estimates have been broadly 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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