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Why Is Thor Industries (THO) Up 3.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Thor Industries (THO). Shares have added about 3.6% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.

Thor Beats Q1 Earnings Estimates

Thor posted adjusted earnings of $4.34 per share, which beat the Zacks Consensus Estimate of $3.10. This outperformance can be attributed to higher-than-anticipated revenues across North American Towable and Motorized RVs segments. The bottom line jumped 111.7% from the year-ago profit of $2.05 per share. The company registered revenues of $3,958.2 million for the quarter under review, topping the Zacks Consensus Estimate of $3,397 million. The top line recorded a 56% year-over-year increase.

Segmental Results

North American Towable RVsRevenues from the segment came in at $2,240.8 million, surging 61% 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 $1,750 million. Pretax profit totaled $266.3 million, up from $141.2 million recorded in the year-ago period, thanks to higher sales and improved gross profit margins. At quarter-end, the unit’s total backlog was $10.4 billion, skyrocketing from $4.4 billion as of Oct 31, 2020.

North American Motorized RVsRevenues from the segment totaled $925 million, which soared 87.3% year over year, thanks to higher unit sales and the Tiffin Group buyout benefits. The top line also outpaced the consensus mark of $799 million. Pretax profit came in at $88.9 million, up from $41.6 million recorded in the year-ago period. Backlog in the segment summed $4.3 billion, jumping from $2.2 billion as of Oct 31, 2020.

European RVs: Revenues from the segment came in at $633 million, up 5.1% from the year-ago period driven by higher unit shipments and a favorable product mix. The top line, however, missed the consensus mark of $663 million. The segment incurred pretax loss of $18 million, wider than the year-ago loss of $5.5 million. Backlog of the segment was $3.3 billion, reflecting a growth from $2.3 billion recorded on Oct 31, 2020.

Financials and Consolidated Backlog

As of Oct 31, 2021, Thor had cash and cash equivalents of $339.3 million, and long-term debt of $2,232.3 million. Consolidated backlog as of quarter-end was $18.07 billion, reflecting a year-over-year rise of 100%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 16.79% due to these changes.

VGM Scores

Currently, Thor Industries has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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. Notably, Thor Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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