Thermon Group Holdings (THR) AI Stock Analysis

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Thermon Group Holdings

(NYSE:THR)

Rating:75Outperform

Price Target:―

Thermon Group Holdings exhibits strong financial performance with effective cash flow and profit margins, driving a favorable score. However, bearish technical indicators and challenges from tariff uncertainties and large CapEx projects temper the outlook. The company’s strategic focus on diverse markets and operational efficiencies remains a positive factor.

Thermon Group Holdings (THR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$919.54M

Dividend YieldN/A

Average Volume (3M)195.19K

Price to Earnings (P/E)17.7

Beta (1Y)1.33

Revenue Growth0.48%

EPS Growth-5.52%

CountryUS

Employees1,416

SectorIndustrials

Sector Strength92

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)0.56

Shares Outstanding33,088,726

10 Day Avg. Volume259,918

30 Day Avg. Volume195,195

Financial Highlights & Ratios

PEG Ratio3.37

Price to Book (P/B)1.98

Price to Sales (P/S)0.00

P/FCF Ratio16.63

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$36.00

Price Target Upside29.54% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Thermon Group Holdings Business Overview & Revenue Model

Company DescriptionThermon Group Holdings, Inc. (THR) is a leading global provider of industrial process heating solutions. The company operates primarily in the energy, chemical processing, and power generation sectors, offering a comprehensive suite of products and services designed to maintain and optimize the performance and safety of critical industrial operations. Thermon specializes in heat tracing solutions, control systems, and related technologies that ensure precise temperature control across various applications.

How the Company Makes MoneyThermon Group Holdings generates revenue through the sale of its specialized heating solutions, which include heat tracing cables, control systems, and turnkey installation services. The company leverages its expertise in engineering and design to offer comprehensive solutions that are tailored to the specific needs of its clients in industries such as oil and gas, chemical processing, and power generation. Additionally, Thermon provides ongoing maintenance and support services, creating recurring revenue streams. The company's earnings are further bolstered by strategic partnerships and a global distribution network that extends its market reach and enhances customer engagement.

Thermon Group Holdings Earnings Call Summary

Earnings Call Date:May 22, 2025

(Q4-2025)

% Change Since: -4.57%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a generally positive outlook with strong organic growth, strategic achievements, and margin expansion, tempered by challenges from tariffs and economic uncertainty. While there are some areas of concern such as large CapEx revenue softness and potential macroeconomic headwinds, the overall momentum and strategic progress provide a balanced view.

Q4-2025 Updates

Positive Updates

Strong Organic Growth and Bookings Momentum

The company reported 3% organic growth in Q4 2025, the first in over a year, and a 29% increase in backlog from last year. The book-to-bill ratio was 1.08 times for the year, demonstrating favorable trends in end markets.

Operational Excellence and Margin Expansion

EBITDA margin for Q4 2025 was 22.7%, a 423 basis point improvement from last year. Adjusted EBITDA margin for fiscal 2025 was 22%, up 86 basis points from last year.

Successful Strategic Initiatives

The company achieved its goal of 70% revenue from diverse end markets two years early and reported significant advancements in its 3D initiatives, contributing $93 million in revenue.

Share Repurchase and Financial Discipline

Thermon repurchased over $14 million in shares during Q4 and refreshed its share repurchase authorization to $50 million. The company finished fiscal 2025 with a net leverage of just under one times.

Positive Impact of Acquisitions

The acquisition of Vapor Power expanded the addressable market by 25%, and the Fati acquisition doubled its backlog due to strong demand from legacy customers.

Negative Updates

Softness in Large CapEx Revenue

Large capital project revenue was down 5% year-over-year in Q4 2025, reflecting continued softness despite improved booking momentum.

Tariff and Trade Challenges

Tariffs present challenges with an expected annualized impact of $16 to $20 million on a gross basis, with a net impact of $4 to $6 million after mitigation.

Economic Uncertainty and Potential Slowdown

The company expressed caution due to broader macro uncertainty and potential headwinds in the second half of fiscal 2026, despite strong order momentum and backlog.

Company Guidance

During the Thermon Group Holdings' Fourth Quarter Fiscal Year 2025 earnings call, CEO Bruce Thames highlighted significant metrics related to the company's performance and strategic initiatives. The company achieved 3% organic growth in Q4, marking the first positive growth in over a year, driven by increased activity in the LNG market. Thermon's backlog as of March 31st rose by 29% compared to the previous year, with a 20% increase in organic backlog. The EBITDA margin for Q4 was 22.7%, a 423 basis point improvement from the previous year, reflecting operational excellence and a favorable revenue mix. For fiscal 2025, Thermon reported a revenue of $498 million, up by 1% year-over-year despite a 37% decline in large capital projects, and adjusted EBITDA margin increased by 86 basis points to 22%. The company generated $536 million in bookings with a book-to-bill ratio of 1.08, and free cash flow reached $53 million. Thermon also made significant strides with its 3D initiatives—diversification, decarbonization, and digitization—contributing $93 million to revenue. The acquisition of Vapor Power contributed to a 25% increase in the sales pipeline, and the backlog growth was supported by a strong bid pipeline, up 25% from the previous year. The company also returned over $14 million to shareholders via a share repurchase program and made $14.5 million in optional debt repayments, maintaining a net leverage of just under one times.

Thermon Group Holdings Financial Statement Overview

Summary

Thermon Group Holdings shows robust financial health with solid revenue growth, strong profit margins, and effective cash flow management. The company has a strong equity position and low leverage, which enhances its financial stability. However, maintaining low leverage remains crucial to sustain long-term stability.

Income Statement

Very Positive

Thermon Group Holdings shows robust revenue growth with a 12.3% increase in the latest year and a strong gross profit margin of 37.6% for TTM. Net profit margin is healthy at 8.4%, and EBIT margin is solid at 13.4%. The company has consistently grown its revenue and profits, indicating strong market demand and operational efficiency.

Balance Sheet

Positive

The company maintains a strong equity position with an equity ratio of 64.0% and a low debt-to-equity ratio of 0.07, indicating prudent financial management. Return on equity is decent at 9.5% for TTM, showcasing effective use of shareholder capital. However, attention should be given to maintaining low leverage to mitigate financial risk.

Cash Flow

Very Positive

Thermon Group Holdings demonstrates solid cash flow management with a significant free cash flow growth of 5.8% in the latest period. The operating cash flow to net income ratio is robust at 1.47, indicating efficient cash conversion. The company shows a strong ability to generate cash, supporting future growth initiatives.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
555.52M	494.63M	440.59M	355.67M	276.18M	383.49M
	Gross Profit
209.03M	211.56M	185.13M	140.12M	117.24M	161.64M
	EBIT
74.57M	75.37M	55.19M	38.41M	25.02M	32.66M
	EBITDA
98.94M	95.36M	74.33M	54.45M	30.26M	59.63M
	Net Income Common Stockholders
46.63M	51.59M	33.67M	20.09M	877.00K	11.94M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
38.74M	48.63M	35.63M	41.45M	40.12M	43.24M
	Total Assets
763.39M	767.74M	649.63M	636.67M	617.88M	620.90M
	Total Debt
166.90M	187.49M	128.28M	141.64M	161.40M	190.68M
	Net Debt
128.15M	138.86M	92.64M	100.20M	121.28M	147.44M
	Total Liabilities
274.71M	292.85M	230.64M	237.47M	148.50M	274.47M
	Stockholders Equity
488.69M	474.89M	418.99M	399.20M	379.16M	346.44M
Cash Flow		Free Cash Flow
58.12M	54.94M	48.26M	23.53M	22.16M	59.87M
	Operating Cash Flow
68.43M	65.95M	57.71M	28.75M	30.29M	70.73M
	Investing Cash Flow
-12.56M	-109.52M	-44.55M	-4.53M	-7.83M	-10.01M
	Financing Cash Flow
-68.83M	56.53M	-13.46M	-22.66M	-28.20M	-46.54M

Thermon Group Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price27.79

Price Trends

50DMA

27.02

Positive

100DMA

28.01

Negative

200DMA

28.70

Negative

Market Momentum

MACD

-0.21

Positive

RSI

52.10

Neutral

STOCH

61.56

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THR, the sentiment is Positive. The current price of 27.79 is below the 20-day moving average (MA) of 28.19, above the 50-day MA of 27.02, and below the 200-day MA of 28.70, indicating a neutral trend. The MACD of -0.21 indicates Positive momentum. The RSI at 52.10 is Neutral, neither overbought nor oversold. The STOCH value of 61.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for THR.

Thermon Group Holdings Risk Analysis

Thermon Group Holdings disclosed 35 risk factors in its most recent earnings report. Thermon Group Holdings reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Thermon Group Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRC	76 Outperform	$978.41M	22.00	12.06%	1.98%	0.92%	21.96%
THR	75 Outperform	$919.54M	17.69	11.03%	―	0.48%	-5.52%
TNC	69 Neutral	$1.39B	20.86	11.04%	1.56%	1.35%	-40.63%
HLIO	67 Neutral	$1.08B	29.03	4.27%	1.11%	-5.39%	12.14%
Sector *	62 Neutral	$759.40M	8.20	4.79%	3.79%	1.56%	-35.62%
HI	48 Neutral	$1.43B	―	-18.22%	4.39%	0.31%	-423.59%
NNE	35 Underperform	$1.07B	―	-45.55%	―	―	―

* Industrials Sector Average

Performance Comparison

THR

Thermon Group Holdings

27.79

-2.83

-9.24%

GRC

Gorman-Rupp Company

37.21

1.67

4.70%

Hillenbrand

20.36

-21.42

-51.27%

HLIO

Helios Technologies

32.34

-14.94

-31.60%

TNC

Tennant Co

74.66

-23.10

-23.63%

NNE

Nano Nuclear Energy Inc.

31.19

23.80

322.06%

Thermon Group Holdings Corporate Events

Executive/Board Changes

Thermon Group Announces Retirement of Mark Roberts

Neutral

Feb 20, 2025

On February 17, 2025, Thermon Group Holdings announced that Mark Roberts, Senior Vice President of Thermon Heating Systems and Engineering, will retire from his position effective June 30, 2025. To ensure a smooth transition, Roberts will serve as an independent consultant until June 30, 2026, receiving compensation and continuing to vest in certain stock options. This transition plan reflects the company’s focus on maintaining stability and continuity in its leadership and operations.

Business Operations and StrategyFinancial Disclosures

Thermon Group Reports Strong Q3 Fiscal 2025 Results

Positive

Feb 6, 2025

Thermon reported its third quarter fiscal 2025 results on February 6, 2025, highlighting a revenue of $134.4 million and a net income increase of 17.1% to $18.5 million. The company emphasized its strategic focus on diverse end markets, recurring revenue streams, and operational excellence, which helped offset lower project-related revenues while maintaining strong financial discipline with a net leverage ratio of 1.1x.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.