Thor Industries - Aggressive Growth

By Zacks | January 08, 2013 AAA

Thor Industries Inc. (THO) reported solid year-over-year advances in earnings per share and revenues during its fiscal first quarter, driven by solid growth in the recreational vehicles (RV) market and a stable bus market. Despite economic uncertainty and strong competition, this Zacks #1 Rank (Strong Buy) manufacturer of RVs, buses and ambulances is expected to deliver double-digit growth in earnings for fiscal 2013 and beyond. Impressive Earnings Growth On November 26, Thor Industries announced fiscal first quarter earnings of 58 cents per share, which was shy of the Zacks Consensus Estimate but up more than 40% from last year's 41 cents. Revenues of $875.6 million grew 30% from the prior-year quarter, driven by a hefty 36% rise in total RV sales to $761.4 million. Pre-tax income from RV sales shot up 51% to $51.1 million. Meanwhile, bus segment sales increased 3% to $114.2 million. The company expects steady growth in RV sales based on consistent growth in income and declining unemployment. Furthermore, it expects to benefit from its ability to expand production, along with right-sized RV dealer inventories. Earnings Estimates Rising The Zacks Consensus Estimate for fiscal 2013 advanced 4.3% in the past three months to $2.89 per share, reflecting a year-over-year growth of 28.0%. As for fiscal 2014, the Zacks Consensus Estimate rose 6.5% to $3.46 in the same timeframe, suggesting year-over-year growth of 19.6%. Reasonable Valuation Valuation for Thor Industries looks reasonable with shares trading at a forward P/E of 13.4x, a significant 45.5% discount to the peer group average of 24.6x. However, the price-to-sales ratio of 0.6 and price-to-book ratio of 2.3 are at a premium to the corresponding peer group averages. The company also has a higher 1-year ROE of 15.7% compared with the peer group average of 6.1%. Thor Industries is currently trading above its 50- and 200-day moving averages, which stand at $37.66 and $31.81, respectively. Founded in 1980, Thor Industries is headquartered in Jackson Center, Ohio. The $2.0 billion company is the world's largest manufacturer of a wide range of recreation vehicles and small and mid-size commercial buses and ambulances in the U.S. and Canada. It has roughly 1,600 dealers across the U.S. and Canada.
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