Bull Of The Day: Thor Industries (THO)

Founded in 1980, Thor Industries (THO) is one of the world’s largest manufacturers of recreational vehicles (RVs). They IPO’d in 1984, and have grown both organically and through strategic acquisitions since then.

The company operates through 1) Towable Recreational Vehicles, 2) Motorized Recreational Vehicles, and 3) Other, segments.

Impressive Results

The company reported its Q4 fiscal 2017 results on September 27. Adjusted earnings of $2.26 per share were significantly better than the Zacks Consensus Estimate of $1.95 and up 44% year-over-year.

Results were boosted by strong organic growth and the acquisition of Jayco in June last year.

“Thor completed another year of exceptional growth, supported by strong demand from dealers and consumers for our products, notably our expanded lines of more affordably-priced towable and motorized RVs,” said the CEO.

The company has an impressive record of profitability. They have grown their earnings consistently, with a 5-year CAGR of 22.4% for net sales and 27.9% for diluted EPS.  

Rising Earnings Estimates

Analysts have raised their estimates for the company after excellent earnings. The Zacks Consensus Estimate for the current and the next fiscal year have increased to $8.14 per share and $8.83 per share from $7.60 and $8.78, seven days ago.

Thor Industries, Inc. Price and Consensus

 Positive Industry Outlook

High consumer confidence, improving labor markets, low oil prices, rising household wealth and still low interest rates support the RV industry. The company has seen a 10% CAGR in new RV unit shipments since 2010 as a result of a favorable macroeconomic backdrop.

Baby boomers, representing about 23% of the population are Thor’s target market and as they approach retirement age, they will have more time and travel and camping. According to the company, 34% of RVs sold in 2016 were to first-time buyers and 80% of those buyers were under 65 years.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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