Thermon Group Holdings (THR) AI Stock Analysis

• Market Cap: $1.66B
• Dividend Yield: N/A
• Average Volume (3M): 474.04K
• Price to Earnings (P/E): 28.7
• Beta (1Y): 1.12
• Revenue Growth: 3.08%
• EPS Growth: 35.81%
• Country: US
• Employees: 1,416
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 0.66
• Shares Outstanding: 32,848,373
• 10 Day Avg. Volume: 683,665
• 30 Day Avg. Volume: 474,043
• PEG Ratio: 4.47
• Price to Book (P/B): 1.90
• Price to Sales (P/S): 1.88
• P/FCF Ratio: 17.76
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 3.61
• Enterprise Value/Gross Profit: 7.95
• Enterprise Value/Ebitda: 17.49
• 1Y Price Target: $51.00
• Price Target Upside: 1.03% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 2.11
• Revenue Forecast (FY): $522.63M

• Rating: 82 Outperform
• Price Target: $58.00 ▲(14.90% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by strong financial quality (expanded margins, healthy cash generation, and very low leverage) and supportive technical momentum. Recent raised guidance and strong order/backlog trends further strengthen the outlook, while the main constraint is a relatively rich valuation (P/E ~28.9) alongside some execution/timing risks tied to large projects and newer product ramps.

Positive Factors

Very conservative balance sheet / low leverage

Thermon's extremely low debt-to-equity (~0.05) and rising equity provide durable financial flexibility to fund capex, acquisitions, and buybacks without stressing cash flow. This conservatism reduces refinancing risk and supports multi-year investment in product ramps and structural initiatives.

Sustained margin expansion and solid cash generation

Higher gross and net margins, alongside growing operating and free cash flow, indicate durable operational improvements and pricing/leverage gains. Strong cash generation supports reinvestment and shareholder returns and cushions the business against cyclicality in industrial capex cycles.

Merger with CECO expands scale, diversification and synergies

The announced combination is a structural change that materially increases scale, cross-sells complementary thermal and environmental solutions, and targets $40M in synergies. Greater scale and product breadth should strengthen aftermarket revenue, broaden end-market exposure, and enhance long-term competitive position.

Negative Factors

Protracted large-project conversion timelines

A meaningful portion of recent bookings are in large projects with multi-quarter conversion timelines. This creates durable execution and timing risk: revenues can lag orders for many quarters, making near-term growth dependent on on-time project delivery and capacity to execute complex installs.

Early-stage commercialization risk for medium-voltage heaters

While the pipeline is substantial, the product line's backlog and orders are still small and concentrated. Multi-year conversion risk and execution hurdles for new manufacturing and channel scaling mean realized revenue and margins from this growth vector are uncertain for several quarters to years.

Guidance sensitivity to tariffs/policy and seasonal margin variability

Management's outlook depends on stable tariffs and policy assumptions, and the business shows seasonal margin swings. Persistent policy shifts or tariff changes, plus seasonal heating demand, can structurally alter margin realization and revenue timing, increasing forecast uncertainty across quarters.

Thermon Group Holdings Business Overview & Revenue Model

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.

How the Company Makes Money

Thermon generates revenue through the sale of its heat tracing products and systems, along with related services such as installation, maintenance, and support. The company operates on a direct sales model, often working closely with engineering firms and contractors to secure contracts for large-scale projects in critical infrastructure sectors. Key revenue streams include sales of heat tracing cables, control systems, and installation services. Additionally, Thermon benefits from long-term relationships with major players in the oil & gas and chemical manufacturing industries, which provide consistent demand for its products. Partnerships with technology providers and distributors also enhance its market reach and drive sales.

Thermon Group Holdings Financial Statement Overview

Summary

Strong fundamentals supported by sharply improved profitability (TTM net margin ~11% and gross margin ~45%), meaningful revenue expansion versus earlier years, and a very conservative balance sheet (debt-to-equity ~0.05). Offsetting factors are slowing recent revenue growth and only moderate consistency in cash conversion relative to earnings/EBITDA.

Income Statement

Profitability and scale have improved meaningfully over time: revenue rose from $276.2M (FY2021) to $498.2M (FY2025 annual), with TTM (Trailing-Twelve-Months) revenue at $522.0M. Margins expanded sharply versus earlier years, with net margin improving from ~0.3% (FY2021) to ~10–11% (FY2024–FY2025) and TTM at ~11.3%. Gross margin also strengthened to ~45.4% in TTM. The main watch-out is a clear deceleration in growth lately (FY2025 revenue growth ~0.7% vs. strong growth in FY2022–FY2024), suggesting the next leg of earnings gains may rely more on execution and margin discipline than topline momentum.

Balance Sheet

Balance sheet leverage is very conservative, highlighted by total debt of $24.7M in TTM (Trailing-Twelve-Months) versus $538.7M of equity, implying very low leverage (debt-to-equity ~0.05). This is a major improvement from prior years where debt-to-equity generally sat around ~0.31–0.43. Equity has also steadily increased over time, supporting financial flexibility. Returns on equity are solid and stable (roughly ~10–11% in FY2024–FY2025 and ~11.4% in TTM), though not exceptionally high, which is typical for a conservatively levered industrial company.

Cash Flow

Cash generation is solid and generally improving: operating cash flow increased from $30.3M (FY2021) to $63.1M (FY2025 annual) and $68.2M in TTM (Trailing-Twelve-Months). Free cash flow is also healthy at $54.7M in TTM and has grown strongly in TTM (~9.2%). Free cash flow has been consistently below net income (about ~0.80–0.84x recently), indicating earnings convert to cash reasonably well but not perfectly. A key risk is that operating cash flow has not consistently covered EBITDA strongly (coverage ~0.56–0.62), suggesting working-capital needs or timing effects can meaningfully influence reported cash generation.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	522.01M	498.21M	494.63M	440.59M	355.67M	276.18M
Gross Profit	237.20M	222.90M	211.56M	185.13M	140.12M	116.87M
EBITDA	107.78M	102.78M	95.36M	74.33M	54.45M	30.26M
Net Income	58.80M	53.52M	51.59M	33.67M	20.09M	877.00K
Balance Sheet
Total Assets	816.70M	755.45M	767.74M	649.63M	636.67M	617.88M
Cash, Cash Equivalents and Short-Term Investments	46.86M	39.54M	48.63M	35.63M	41.45M	40.12M
Total Debt	173.15M	151.69M	187.49M	128.28M	141.64M	161.40M
Total Liabilities	278.00M	260.14M	292.85M	230.64M	237.47M	239.01M
Stockholders Equity	538.70M	495.31M	474.89M	418.99M	399.20M	378.87M
Cash Flow
Free Cash Flow	54.73M	52.87M	54.94M	48.26M	23.53M	22.16M
Operating Cash Flow	68.21M	63.12M	65.95M	57.71M	28.75M	30.29M
Investing Cash Flow	-13.53M	-14.97M	-109.52M	-44.55M	-4.53M	-7.83M
Financing Cash Flow	-44.32M	-56.42M	56.53M	-13.46M	-22.66M	-28.20M

Thermon Group Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 50.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 50.48 is above the 20-day moving average (MA) of 48.89, above the 50-day MA of 43.27, and above the 200-day MA of 32.26, indicating a bullish trend. The MACD of 2.35 indicates Positive momentum. The RSI at 63.72 is Neutral, neither overbought nor oversold. The STOCH value of 31.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for THR.

Thermon Group Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THR	82 Outperform	$1.66B	28.71	11.45%	―	3.08%	35.81%
GHM	76 Outperform	$907.97M	60.99	12.15%	―	16.04%	75.37%
GRC	69 Neutral	$1.72B	31.94	13.45%	1.49%	3.19%	31.51%
SXI	68 Neutral	$2.94B	55.62	7.72%	0.57%	18.51%	-28.69%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TNC	53 Neutral	$1.14B	34.87	7.17%	1.59%	-2.24%	-48.77%

Thermon Group Holdings Corporate Events

Thermon Group Announces $2.2 Billion Merger With CECO

On February 23–24, 2026, CECO Environmental Corp. and Thermon Group Holdings entered into a definitive stock-and-cash merger agreement valued at about $2.2 billion, creating a combined industrial platform focused on environmental, thermal and process heating solutions. Thermon shareholders can elect mixed, all-cash or all-stock consideration at a premium to Thermon’s prior closing price, with the deal unanimously approved by both boards and expected to close in mid-2026, leaving CECO shareholders owning roughly 62.5% of the combined company and adding two Thermon directors to CECO’s enlarged board.

The transaction is designed to expand CECO’s scale and portfolio into complementary industrial process heating and thermal management, deepen exposure to secular trends such as energy transition and decarbonization, and deliver about $40 million in annual cost synergies within three years. CECO has lined up a committed financing package, secured voting support from holders of about 15.2% of its shares, and expects the combined company to benefit from greater end-market diversification, higher aftermarket revenue mix and an enhanced financial and growth profile for customers, employees and shareholders.

The most recent analyst rating on (THR) stock is a Buy with a $57.00 price target. To see the full list of analyst forecasts on Thermon Group Holdings stock, see the THR Stock Forecast page.

Thermon Group Posts Record Q3 Results, Raises Outlook

On February 5, 2026, Thermon reported record third-quarter fiscal 2026 results, with revenue up 9.6% year-on-year to $147.3 million, gross profit rising 10.5% and adjusted EBITDA increasing 11.9% to $35.6 million, while adjusted net income climbed 15.3% despite essentially flat GAAP net income. The company recorded strong order momentum with new bookings up 14.1% and a 1.1x book-to-bill ratio, driving a 10% backlog increase and supporting a raise to full-year guidance, as management highlighted robust demand in data center, power generation and LNG end markets, rapid progress in new offerings such as medium voltage heaters and liquid load bank testing solutions, and a strengthened balance sheet with net leverage at 0.8x and ample liquidity to fund organic growth, acquisitions and capital returns.

The most recent analyst rating on (THR) stock is a Buy with a $53.00 price target. To see the full list of analyst forecasts on Thermon Group Holdings stock, see the THR Stock Forecast page.