Thermon Group Holdings, Inc. Just Recorded A 5.6% Revenue Beat: Here's What Analysts Think
One of the biggest stories of last week was how Thermon Group Holdings, Inc. (NYSE:THR) shares plunged 24% in the week since its latest third-quarter results, closing yesterday at US$24.61. Results overall were respectable, with statutory earnings of US$0.46 per share roughly in line with what the analyst had forecast. Revenues of US$136m came in 5.6% ahead of analyst predictions. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Thermon Group Holdings
Taking into account the latest results, the current consensus from Thermon Group Holdings' sole analyst is for revenues of US$561.0m in 2025. This would reflect a solid 15% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 18% to US$1.72. In the lead-up to this report, the analyst had been modelling revenues of US$517.9m and earnings per share (EPS) of US$1.93 in 2025. So it's pretty clear the analyst has mixed opinions on Thermon Group Holdings after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.
The analyst also upgraded Thermon Group Holdings' price target 36% to US$32.00, implying that the higher revenue expected to generate enough value to offset the forecast decline in earnings.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analyst is definitely expecting Thermon Group Holdings' growth to accelerate, with the forecast 12% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Thermon Group Holdings to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Thermon Group Holdings. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Thermon Group Holdings going out as far as 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Thermon Group Holdings you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
