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Thermon Group (THR) Soars 7%: Is Further Upside Left in the Stock?

Thermon Group (THR) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help...

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This story originally appeared on Zacks

Thermon Group (THR) shares rallied 7% in the last trading session to close at $17.20. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.7% loss over the past four weeks.

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THR’s rally is largely driven by solid demand trends in the end markets. Despite large project shipments negatively impacting its gross margins, the company is committed to investing in diversification and developing strategic initiatives. Also, continued realization of cost savings driven by accretive orders act as a major tailwind. These solid factors are likely to infuse positive sentiments among investors in the long run, thereby boosting the stock.

This maker of heat tracing products is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $73.05 million, up 10% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Thermon Group, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on THR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>



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