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1. Company Snapshot

1.a. Company Description

Thermon Group Holdings, Inc.provides engineered industrial process heating solutions for process industries worldwide.Its products include electric heating products, such as air heaters and heating accessories, boilers and calorifiers, controlling and monitoring solutions, heat tracing systems, tank heating systems, thermostats, tubing bundles, and system accessories, as well as strip, tubular, immersion, and process heaters; and gas heating products, including enclosure and explosion proof gas catalytic heaters, gas fired blowers, and gas heating accessories that comprise regulators, valves, mounting brackets, and battery cables.


The company also offers specialty products, which include CEMS and analytical systems, commercial construction products and services, control panels, engineered products, compressed gas scrubbing systems, temporary power solutions, and snow clearing devices for rail track and switch equipment; and steam heating solutions comprising heat transfer compounds, steam heated bundles, steam supply and condensate return lines, steam tracing solutions, steam trace accessories, and tank heating products.In addition, it provides design engineering solutions that include design optimization studies, product selection assistance, and computer-generated drawing packages; energy audit services; procurement and project management services; procurement and project management services; turnkey construction installation; recurring facility assessment or audit; maintenance services; and technical support services.The company offers its solutions to chemical and petrochemical, oil and gas, power generation, rail and transit, commercial, transportation, food and beverage, pharmaceutical, and mineral processing industries, as well as data centers, semiconductor facilities, and other markets through a network of sales and service professionals, and distributors.


Thermon Group Holdings, Inc.was founded in 1954 and is headquartered in Austin, Texas.

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1.b. Last Insights on THR

Thermon Group Holdings, Inc.'s recent performance was negatively impacted by a 5.4% decline in Q1 revenue, falling to $108.9 million. The company's quarterly earnings of $0.36 per share missed estimates, and adjusted EBITDA decreased by 8.6% to $21.2 million. Management cited delayed backlog conversion, which pushed back roughly $10 million in revenue, as a key challenge. Despite this, the company confirmed its full-year 2026 guidance and reported a solid backlog growth. Additionally, Thermon introduced new products, including Poseidon and Pontus Liquid Load Banks.

1.c. Company Highlights

2. Thermon Group's Q2 FY2026 Earnings: Strong Revenue Growth and Margin Expansion

Thermon Group's second-quarter fiscal 2026 results demonstrated a 15% year-over-year revenue increase to $131.7 million, accompanied by a 29% rise in adjusted EBITDA to $30.6 million. The company's adjusted EBITDA margin expanded to 23.2% from 20.8% in the previous year. Earnings per share (EPS) came in at $0.55, significantly beating estimates of $0.36. The strong financial performance was driven by a 41% year-over-year increase in Large CapEx revenue, primarily due to two large North American LNG projects.

Publication Date: Dec -21

📋 Highlights
  • Revenue & EBITDA Growth:: Q2 revenue rose 15% YoY to $131.7M; adjusted EBITDA climbed 29% to $30.6M (margin 23.2%, up from 20.8%).
  • Large CapEx Revenue Surge:: $24.7M in large CapEx revenue, 41% YoY growth, driven by North American LNG projects.
  • Full-Year Guidance Raised:: Revenue $506M–$527M (4% growth midpoint); adjusted EBITDA $112M–$119M (6% growth midpoint).
  • Data Center Diversification:: $30M quote log for Poseidon liquid load bank; market projected to grow at 21% CAGR to $386M by 2032.
  • Balance Sheet Strength:: Net leverage 1.0x ($110M net debt, $129M liquidity); $6M share repurchase in Q2 (total $36M since FY25).

Revenue Growth Drivers

The company's revenue growth was largely driven by its Large CapEx segment, with a significant contribution from two major LNG projects in North America. The establishment of a global engineering center in Mexico and increased productivity also contributed to the 41% year-over-year rise in Large CapEx revenues. Thermon's CEO, Bruce Thames, highlighted the company's progress in its 3D growth strategy, which includes decarbonization, digitization, and diversification.

Guidance Raise and Future Outlook

Thermon raised its full-year 2026 financial guidance, with revenue expected to be in the range of $506 million to $527 million, representing 4% growth at the midpoint. Adjusted EBITDA guidance was also raised to a range of $112 million to $119 million, representing 6% growth at the midpoint. The company aims to sustain its current 23% EBITDA margin level in the second half of the year, with gross margins expected to remain strong.

Valuation and Growth Prospects

Thermon's current valuation metrics indicate a P/E Ratio of 21.55, P/S Ratio of 2.49, and EV/EBITDA of 12.3. Analysts estimate next year's revenue growth at 3.9%. With a strong balance sheet, a net leverage ratio of 1.0x, and $129 million in total cash and available liquidity, Thermon is well-positioned to pursue organic and inorganic growth opportunities. The company's focus on adjusted EBITDA margin, with a goal of reaching 24%, and its diversified business strategy, including a growing presence in the data center market, are expected to drive future growth.

Balance Sheet and Capital Allocation

Thermon ended the quarter with net debt of $110 million and a net leverage ratio of 1.0x. The company repurchased $6 million in shares during the second quarter, bringing its total shares repurchased since the start of fiscal '25 to $36 million. With a strong balance sheet and a focus on organic growth initiatives, Thermon is also exploring inorganic growth opportunities.

3. NewsRoom

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Thermon Group Q3 Earnings Call Highlights

Feb -07

Source: defenseworld.net

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Thermon Group Holdings, Inc. (THR) Q3 2026 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

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Thermon Group (THR) Beats Q3 Earnings and Revenue Estimates

Feb -05

Source: zacks.com

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Thermon Reports Third Quarter Fiscal 2026 Results

Feb -05

Source: accessnewswire.com

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Thermon Schedules Third Quarter Fiscal 2026 Earnings Conference Call - February 5, 2026

Jan -29

Source: accessnewswire.com

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SG Americas Securities LLC Purchases Shares of 14,813 Thermon Group Holdings, Inc. $THR

Jan -26

Source: defenseworld.net

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Thermon Group (NYSE:THR) Stock Price Crosses Above Two Hundred Day Moving Average – Here’s Why

Jan -21

Source: defenseworld.net

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Top 10 Small-Cap Stocks For 2026

Jan -12

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Highly Engineered Industrial Process Heating Solutions

Expected Growth: 10%

Thermon Group Holdings, Inc.'s highly engineered industrial process heating solutions drive 10% growth, fueled by increasing demand for energy efficiency, rising adoption of electrification in industrial processes, and growing need for reliable and precise temperature control in industries such as oil and gas, chemical processing, and power generation.

7. Detailed Products

Heat Tracing Solutions

Thermon's heat tracing solutions provide reliable and efficient heat management for various industrial processes, ensuring optimal temperature control and process optimization.

Thermal Insulation Solutions

Thermon's thermal insulation solutions provide high-performance insulation for pipes, tanks, and equipment, reducing heat loss and energy consumption.

Electrical Heat Tracing Systems

Thermon's electrical heat tracing systems provide reliable and efficient heat management for various industrial applications, ensuring optimal temperature control and process optimization.

Steam Tracing Solutions

Thermon's steam tracing solutions provide efficient and reliable heat management for various industrial processes, ensuring optimal temperature control and process optimization.

Temperature Measurement and Control Systems

Thermon's temperature measurement and control systems provide accurate and reliable temperature monitoring and control for various industrial applications.

8. Thermon Group Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Thermon Group Holdings, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the availability of alternative heating solutions.

Bargaining Power Of Customers

Thermon Group Holdings, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Thermon Group Holdings, Inc. relies on a few key suppliers for raw materials, which gives them some bargaining power. However, the company's long-term relationships with suppliers and its diversified supply chain mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the heat tracing and heating solutions market. New entrants would need to invest heavily in research and development, manufacturing, and marketing to compete with established players like Thermon Group Holdings, Inc.

Intensity Of Rivalry

The heat tracing and heating solutions market is highly competitive, with several established players competing for market share. Thermon Group Holdings, Inc. faces intense competition from companies like nVent Electric plc and Pentair plc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.93%
Debt Cost 3.95%
Equity Weight 73.07%
Equity Cost 9.74%
WACC 8.18%
Leverage 36.85%

11. Quality Control: Thermon Group Holdings, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

50.63$

Current Price

50.63$

Potential

-0.00%

Expected Cash-Flows