Thor Industries Inc. (THO, Financial) is expected to announce third-quarter earnings for fiscal 2018 on Wednesday after the closing bell.
The company that sells towable trailers and motor homes will update shareholders with figures on earnings and sales. Its subsidiaries include Airstream, Jayco, Heartland RV and Livin Lite RV. The Indiana-based company has production facilities in Michigan, Indiana, Ohio, Idaho and Oregon.
The average analyst is forecasting earnings of $2.58 per share, a growth of 47 cents from fiscal 2017 and a mean of 11 estimates, which range between a low of $2.40 per share and a high of $2.80 per share.
Analysts expect earnings to drop from a top line of $2.26 billion. At the end of the comparable of fiscal 2017, revenue was $2 billion. Estimates on third-quarter revenue range between a low of $2.16 billion and a high of $2.41 billion. A total of nine analysts were surveyed.
The chart below illustrates the trend in revenues. The company has increased revenues over time, as illustrated by the chart of GuruFocus.
THO data by GuruFocus.com
Currently, net income represents a 5.38% portion of the company’s trailing 12-month turnover. The chart powered by GuruFocus portrays the trend over the last 30 years.
THO data by GuruFocus.com
The industry has a net margin of 3.96%. Other indicators show that the company has a return on equity of 27.93% versus an industry average of 9.51% and a 3-year revenue growth rate of 27.6% versus an industry median of 3.1%.
GuruFocus ranks Thor Industries’ profitability and growth with a 6 rating out of 10.
Analyst forecast an 18.8% growth rate in the company’s annual net profit from 2018 to 2019. Over the next five fiscals, the bottom line is projected to grow based on an average annual rate of 17%.
Balance Sheet and Cash Flow
In the last 12 months of business, the company created a cash flow of $423 million from the sale of recreational vehicles and met financial obligations of $133.4 million. Thor Industries used nearly $290 million to make investments and to pay dividends to its shareholders. The company has set aside nearly $110 million in cash on hand and securities and has a debt of $80 million, as of the second quarter of fiscal 2018. The total stakeholder’s equity is worth $1.75 billion. Debt-to-equity is 5% while the industry has a median of 51%. Total assets are composed of current assets of $1.33 billion and fixed assets of $1.38 billion. Approximately 85% of total liabilities are made up of obligations and debts, which are due by the company within the following 12-month period. Therefore, Thor Industries has a current ratio of 1.63 versus an industry median of 1.55. The interest coverage ratio of the company is 90.80, according to GuruFocus. This means that Thor Industries doesn’t have any problems in paying interest expenses on the debt outstanding.
GuruFocus assigns a financial strength rating of 8 out of 10.
Dividend and Valuation
Thor Industries dispersed $112.8 million to shareholders in dividends over the last 12 months of trading. The company is paying a quarterly cash dividend of 37 cents for a forward annual dividend of $1.48 per share for a yield of 1.37%.
The stock in Thor Industries has a forward price earnings ratio of 8.73 times versus an industry median of 11.52 times. When the forward price earnings ratio is multiplied by a weighted quarterly average earnings per share of $10.5 for full fiscals 2018 and 2019, the yield is $91.70 per share. That is below the current share price of $93.
The stock has fallen 40% this year. The 52-week range is $89.89 to $161.48 per share. Thor Industries has a market capitalization of $4.9 billion and a price-book ratio of 2.8 times. The industry has a median price-book ratio of 1.63 times.
The stock is currently below the Peter Lynch earnings line (P/E = 15) of $124.7 and the Price at Med without NRI (P/E = 15.46) of $128.40.
The stock has a recommendation rating of 1.6 and an average target price of $155.56 per share.
As of June, a total of nine analysts out of 12 suggest buying shares while eight analysts recommend a Strong Buy approach. A total of three analysts recommend a Hold on the shares.
(Disclosure: I have no positions in any security mentioned in this article.)
