NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 20.4%. Since the same quarter one year prior, revenues rose by 16.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- THO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 61.61% to $164.59 million when compared to the same quarter last year. In addition, THOR INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -49.16%.
- THOR INDUSTRIES INC's earnings per share declined by 15.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, THOR INDUSTRIES INC reported lower earnings of $1.92 versus $2.08 in the prior year. This year, the market expects an improvement in earnings ($2.12 versus $1.92).
Thor Industries, Inc., together with its subsidiaries, engages in the manufacture and sale of various recreation vehicles, and small and mid-size buses, as well as related parts and accessories in the United States and Canada. The company has a P/E ratio of 13.8, equal to the average automotive industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Thor has a market cap of $1.5 billion and is part of the
industry. Shares are down 19.8% year to date as of the close of trading on Tuesday.
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