Scott Buck, an analyst from H.C. Wainwright, reiterated the Buy rating on Transcat. The associated price target remains the same with $116.00.
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Scott Buck has given his Buy rating due to a combination of factors, primarily driven by Transcat’s strategic acquisitions and expected financial performance. The recent acquisition of Essco Calibration Laboratory, the largest in the company’s history, is anticipated to significantly boost revenue and profitability starting in FY26. This acquisition, along with the earlier purchase of Martin Calibration, has added substantial service segment revenue, demonstrating Transcat’s effective acquisition strategy.
Furthermore, Buck anticipates that the Essco acquisition will enhance revenue and margin growth, with expectations of long-term gross margin improvements towards 35%. The valuation of Transcat’s shares at $116 reflects a premium multiple, justified by the company’s high visibility of recurring revenue and earnings. Despite some risks such as potential dilution and acquisition integration challenges, Buck believes the company’s profitable growth trajectory and market position warrant a Buy recommendation.
Based on the recent corporate insider activity of 15 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TRNS in relation to earlier this year.