H.C. Wainwright has elevated its target price for Transcat (TRNS, Financial) to $116 from the previous $106, maintaining a Buy rating on the stock. The firm's revised outlook comes after the company's strong performance in fiscal Q4, signaling a stabilization in organic growth. Analysts suggest this consistent growth positions Transcat as a reliable option amid heightened macroeconomic uncertainties.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Transcat Inc (TRNS, Financial) is $106.50 with a high estimate of $130.00 and a low estimate of $85.00. The average target implies an upside of 12.87% from the current price of $94.36. More detailed estimate data can be found on the Transcat Inc (TRNS) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Transcat Inc's (TRNS, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Transcat Inc (TRNS, Financial) in one year is $100.17, suggesting a upside of 6.16% from the current price of $94.36. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Transcat Inc (TRNS) Summary page.
TRNS Key Business Developments
Release Date: May 20, 2025
- Consolidated Revenue: $278.4 million, up 7% year-over-year.
- Service Revenue: $181.4 million, up 7%, driven by core calibration business.
- Distribution Revenue: $97 million, up 8%, with growth in rental platform.
- Operating Cash Flow: $38.6 million, a record, up 18% year-over-year.
- Fourth Quarter Revenue: $77.1 million, up 9% year-over-year.
- Fourth Quarter Service Revenue: $52 million, up 11%, including $6.8 million from acquisitions.
- Fourth Quarter Distribution Revenue: $25.1 million, up 4% year-over-year.
- Fourth Quarter Gross Profit: $25.9 million, up 8% year-over-year.
- Fourth Quarter Service Gross Margin: 36.2%, expanded by 50 basis points.
- Fourth Quarter Distribution Gross Margin: 28.2%, down 210 basis points.
- Full Year Gross Profit: $89.5 million, up 7% year-over-year.
- Full Year Gross Margin: 32.1%, declined by 20 basis points.
- Fourth Quarter Net Income: $4.5 million, down from $6.9 million in the prior year.
- Fourth Quarter Diluted EPS: $0.48, down from $0.77 in the prior year.
- Fourth Quarter Adjusted Diluted EPS: $0.64.
- Full Year Net Income: $14.5 million, up 6% year-over-year.
- Fourth Quarter Adjusted EBITDA: $12.7 million, up 9% year-over-year.
- Fourth Quarter EBITDA Margin: 16.5%, consistent with last year.
- Full Year EBITDA: $39.7 million, up 3% year-over-year.
- Operating Free Cash Flow: $25.4 million, improved 31% year-over-year.
- Net Debt: $31 million with a leverage ratio of 0.7x.
- Credit Facility Availability: $49 million at quarter end.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Transcat Inc (TRNS, Financial) reported a 7% increase in consolidated revenue for fiscal 2025, reaching $278.4 million, driven by consistent demand for services and products.
- Service revenue grew by 7% to $181.4 million, with strong performance in the core calibration business.
- The acquisition of Martin Calibration, the largest in Transcat's history, is expected to be highly synergistic, expanding geographic reach and capabilities.
- Operating cash flow for fiscal 2025 reached a record $38.6 million, marking an 18% year-over-year increase.
- The company's service segment achieved a gross margin expansion of 50 basis points to 36.2% in the fourth quarter, driven by organic revenue growth and increased productivity.
Negative Points
- Fourth quarter net income decreased to $4.5 million from $6.9 million in the prior year, with diluted earnings per share dropping to $0.48 from $0.77.
- Consolidated gross margin declined by 30 basis points in the fourth quarter, and by 20 basis points for the full year.
- Distribution segment gross margin fell by 210 basis points in the fourth quarter.
- The macroeconomic environment, including tariffs, presents uncertainties that could impact future performance.
- The solutions business is making slow progress, with expectations for improved results and growth still in the future.
