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Tennant Company (TNC)
NYSE:TNC
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Tennant Co
(NYSE:TNC)
69Neutral
Tennant Co (TNC) vs. S&P 500 (SPY)
Market Cap
$1.59B
Dividend Yield1.39%
Average Volume (3M)215.56K
Price to Earnings (P/E)18.8
Beta (1Y)1.21
Revenue Growth3.47%
EPS Growth-24.70%
CountryUS
Employees4,632
SectorIndustrials
Sector Strength72
IndustryIndustrial Goods
Share Statistics
EPS (TTM)4.38
Shares Outstanding18,816,067
10 Day Avg. Volume192,084
30 Day Avg. Volume215,563
Financial Highlights & Ratios
PEG Ratio3.60
Price to Book (P/B)N/A
Price to Sales (P/S)1.21
Price to Cash Flow (P/CF)10.40
P/FCF Ratio10.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$125.00Price Target Upside47.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Tennant Co Business Overview & Revenue Model
Company DescriptionTennant Company (TNC) is a global leader in the design, manufacture, and marketing of solutions that help create a cleaner, safer, and healthier world. The company operates primarily in the industrial and commercial cleaning sector, offering a wide range of products including floor cleaning machines, outdoor cleaning equipment, and parts and consumables. Tennant serves diverse markets such as retail, hospitality, education, healthcare, and industrial facilities, providing innovative and sustainable cleaning solutions to its customers worldwide.
How the Company Makes MoneyTennant Company generates revenue through the sales of its cleaning equipment and related products. The company's primary revenue streams include the sale of floor cleaning machines and outdoor cleaning equipment. Additionally, Tennant earns income from selling parts and consumables, which are essential for the maintenance and operation of its machines. The company also offers service contracts and leasing options, providing customers with flexible solutions to maintain their cleaning equipment. Tennant's revenue is further supported by its global distribution network and strategic partnerships, which enhance its market presence and customer reach.
Tennant Co Financial Statement Overview
Summary
Tennant Co demonstrates strong financial health with steady revenue growth and healthy profitability levels. The company's robust cash flow supports operational initiatives, though the equity ratio indicates potential for improved asset utilization.Income Statement
The company has shown steady revenue growth over the years, with a TTM revenue of $1.29 billion, representing a consistent upward trend. The gross profit margin stands at approximately 42.8%, while the net profit margin is around 6.5%. Despite a slight dip in EBIT margin from 2023, the company maintains a healthy profitability level with an EBITDA margin of 8.9%.78
Positive
Balance Sheet
The balance sheet reflects a strong equity position with a debt-to-equity ratio of zero in the latest period, indicating no reliance on debt financing. However, the equity ratio is relatively low, with stockholders' equity constituting a small part of total assets. Return on equity is moderate at around 19.9%, indicating efficient use of equity to generate profits.65
Positive
Cash Flow
The cash flow statement is robust, with a significant free cash flow growth, indicating strong cash generation ability. The operating cash flow to net income ratio is favorable, showing efficient conversion of profits into cash. Free cash flow to net income ratio also indicates healthy cash reserves relative to income.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.29B | 1.24B | 1.09B | 1.09B | 1.00B | Gross Profit |
| 550.00M | 527.80M | 420.90M | 438.00M | 407.80M | EBIT |
| 114.30M | 138.60M | 87.20M | 93.70M | 63.70M | EBITDA |
| 114.30M | 188.40M | 136.30M | 137.00M | 117.10M | Net Income Common Stockholders |
| 83.70M | 109.50M | 66.30M | 64.90M | 33.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 31.00M | 117.10M | 77.40M | 123.60M | 141.00M | Total Assets |
| 1.19B | 1.11B | 1.09B | 1.06B | 1.08B | Total Debt |
| 254.30M | 242.40M | 317.40M | 293.00M | 337.20M | Net Debt |
| 154.70M | 125.30M | 240.00M | 169.40M | 196.20M | Total Liabilities |
| 568.00M | 535.10M | 613.00M | 626.60M | 676.50M | Stockholders Equity |
| 42.10M | 577.00M | 470.80M | 433.80M | 404.80M |
| Cash Flow | Free Cash Flow | |||
| 68.80M | 164.40M | -54.40M | 46.20M | 103.80M | Operating Cash Flow |
| 89.70M | 188.40M | -25.10M | 69.40M | 133.80M | Investing Cash Flow |
| -78.40M | -23.20M | -24.50M | 1.70M | -29.90M | Financing Cash Flow |
| -25.20M | -122.60M | 8.10M | -84.50M | -42.80M |
Tennant Co Technical Analysis
Negative
84.47
Price Trends
84.75
Negative
85.56
Negative
91.03
Negative
Market Momentum
-0.52
Positive
48.81
Neutral
31.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TNC, the sentiment is Negative. The current price of 84.47 is below the 20-day moving average (MA) of 85.28, below the 50-day MA of 84.75, and below the 200-day MA of 91.03, indicating a bearish trend. The MACD of -0.52 indicates Positive momentum. The RSI at 48.81 is Neutral, neither overbought nor oversold. The STOCH value of 31.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TNC.
Tennant Co Risk Analysis
Tennant Co disclosed 16 risk factors in its most recent earnings report. Tennant Co reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tennant Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $74.68B | 21.38 | 110.24% | 2.28% | -1.30% | 20.26% | |
74 Outperform | $17.39B | 16.61 | 19.95% | 2.47% | <0.01% | 3.74% | |
69 Neutral | $1.59B | 18.83 | 13.98% | 1.39% | 3.47% | -24.70% | |
67 Neutral | $8.22B | 11.26 | 50.69% | 1.07% | 6.26% | 12.62% | |
66 Neutral | $2.21B | 45.36 | 4.80% | ― | 6.47% | ― | |
66 Neutral | $10.69B | 22.69 | 35.36% | 1.51% | -4.23% | -13.42% | |
61 Neutral | $8.21B | 13.22 | 1.07% | 3.07% | 3.78% | -16.88% |
* Industrials Sector Average
Performance Comparison
TNC
Tennant Co
84.47
-26.88
-24.14%
ALSN
Allison Transmission Holdings
96.13
20.73
27.49%
ITW
Illinois Tool Works
254.46
-4.43
-1.71%
KAR
Kar Auction Services
20.69
4.49
27.72%
LECO
Lincoln Electric Holdings
190.50
-54.90
-22.37%
SNA
Snap-on
331.84
51.85
18.52%
Tennant Co Earnings Call Summary
Earnings Call Date: Feb 17, 2025 | % Change Since: -2.86% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlights Tennant Company's successful execution of strategic initiatives, resulting in record net sales and strong order growth. However, challenges persist in APAC with significant declines in China, legal expenses, and ERP modernization costs. The company anticipates a slight organic sales decline in 2025 due to backlog headwinds and currency impacts. Overall, the sentiment reflects a positive trajectory with some notable hurdles.Highlights
Record Net Sales and EBITDA
For the full year, net sales reached $1.287 billion, adjusted EBITDA rose to $208.8 million, and the adjusted EBITDA margin expanded to 16.2%.
Strong Order Growth
Orders increased 6.4% over 2023, well above long-term targets, with volume growth over 5% in Q4 and consistent order growth across the last three quarters.
Successful AMR Product Expansion
AMR equipment sales reached $75 million in 2024, and the new X6 ROVR model will be launched, with AMR revenue targeted to exceed $100 million by 2027.
Strategic M&A and Investments
Activated M&A framework with investments in Brain Corp and acquisition of TCS, contributing to a long-term target of $150 million in net sales growth from M&A over three years.
Lowlights
Decline in APAC Performance
Business performance in APAC impacted by stark demand declines in China and government-induced overproduction, leading to a 19% organic sales decrease in the region.
Legal Contingency Expense
A legal dispute resulted in a jury ruling against Tennant, awarding $9.8 million in damages plus $4.7 million in prejudgment interest.
ERP Modernization Costs
In 2024, invested $37 million in the ERP project, with $14 million expensed and $23 million capitalized, impacting financial results.
Anticipated 2025 Organic Sales Decline
Guidance for 2025 indicates a negative 1% to negative 4% organic sales decline, impacted by $125 million backlog headwind and significant foreign currency headwinds.
Company Guidance
During Tennant Company's fourth quarter and full year fiscal 2024 earnings conference call, the company provided guidance for 2025, highlighting several key metrics and strategic initiatives. Tennant anticipates net sales ranging between $1,210 million and $1,250 million, reflecting an organic sales decline of 1% to 4% due to a $125 million backlog headwind from 2024. Despite this, the company aims for order growth of 3.5% to 7%. Adjusted EBITDA is expected to be between $196 million and $209 million, with an adjusted EBITDA margin ranging from 16.2% to 16.7%. Tennant plans to manage inflation through cost-saving initiatives and pricing discipline, projecting a gross margin expansion of 30 basis points. The company also highlighted its commitment to strategic investments, including a $50 million ERP modernization project, and projected $10 million annual savings from restructuring efforts. Furthermore, Tennant plans to achieve an adjusted EPS of $5.70 to $6.20 per diluted share, with capital expenditures of approximately $20 million. The company is focused on expanding its AMR product line, targeting AMR revenue to exceed $100 million by 2027 and leveraging its strategic partnership with Brain Corp.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.