Thor Industries Indulges Investors after Earnings Beat

Shares of Thor Industries drifted higher on Monday’s extended trading after the company released upbeat Q1 fiscal 2017 earnings. Is it time to trade?

After the closing bell on Monday, Thor Industries released its first quarter earnings for the financial year 2017, beating Wall Street estimates and triggering a rally on its stock.

The manufacturer of recreational vehicles reported adjusted earnings of $1.49 per share, up 26.80% year over year, beating Wall Street estimates of $1.23 per share. Revenues came in at $1.71 billion, up 66 percent year over year, smashing analysts’ expectations of only $1.50 billion.

 

Acquisitions

The strong results are testament that consumers are warming up to Thor’s products, but CEO Bob Martin also talked up the company’s impressive strategy of integrating great acquisitions. And taking a close look at the results, it is easy to see why.

The recent acquisition of Jayco Corp. contributed massively to the growth of Thor’s towable RVs business. Jayco drove revenues of about $467 million to Thor’s top line, a little over 26% of the total. Thor expects solid growth this fiscal 2017, and the management has assured shareholders that they will be on the lookout for exciting growth opportunities, particularly acquisitions. And seeing how Jayco has turned out, shareholders have every reason to cheer.

Technical Picture

Thor is currently trading at $90.44 a share, practically at the same levels before the earnings release. The stock initially rallied 8.70% and touched a 12-month high of $98.31. After delivering solid results, the pullback can only be attributed to profit taking. Currently up 61.07% year to date, Thor has treated investors to a truly great 2016.

The stock has a price to earnings ratio of 18.44, with a dividend yield of 1.48%, and traders who missed the party can still join in on yesterday’s price pullback.

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