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Tennant Company (TNC)
NYSE:TNC
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Tennant Co
(NYSE:TNC)
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Rating:68Neutral
Price Target:
$90.00
▲(9.17% Upside)
Tennant Co's overall stock score reflects stable financial performance and a positive outlook from the latest earnings call, despite challenges in revenue growth and valuation concerns. The company's strong order growth and strategic initiatives in the Americas provide a solid foundation for future performance, while technical indicators suggest a stable momentum.
Tennant Co (TNC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.50B
Dividend Yield1.45%
Average Volume (3M)100.77K
Price to Earnings (P/E)25.2
Beta (1Y)0.98
Revenue Growth-0.38%
EPS Growth-44.93%
CountryUS
Employees4,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.49
Shares Outstanding18,469,130
10 Day Avg. Volume90,511
30 Day Avg. Volume100,771
Financial Highlights & Ratios
PEG Ratio-0.74
Price to Book (P/B)2.47
Price to Sales (P/S)1.19
P/FCF Ratio22.43
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue1.29
Enterprise Value/Gross Profit3.09
Enterprise Value/Ebitda11.99
Forecast
1Y Price Target
$91.50Price Target Upside10.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Tennant Co Business Overview & Revenue Model
Company DescriptionTennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair services, specialty surface coatings, and asset management solutions. It also provides business solutions, such as financing, rental, and leasing programs, as well as machine-to-machine asset management solutions. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IRIS, VLX, IPC, Gaomei, and Rongen brands, as well as private-label brands. Its products are used in retail establishments and distribution centers; factories and warehouses; and public venues, such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, parking lots and streets, and other environments. It markets its products to contract cleaners and businesses through direct sales and service organizations, as well as through a network of authorized distributors. Tennant Company was founded in 1870 and is headquartered in Eden Prairie, Minnesota.
How the Company Makes MoneyTennant generates revenue primarily through the sale of its cleaning equipment and solutions. The company has a diversified revenue model that includes direct sales of machines, aftermarket parts, and consumables, as well as service agreements for maintenance and support. Key revenue streams include new equipment sales, which account for a significant portion of total revenue, and recurring revenue from service contracts and replacement parts. Additionally, Tennant benefits from strategic partnerships with distributors and service providers, enhancing its market reach and customer engagement. The company also invests in research and development to innovate and expand its product offerings, which contributes to its competitive advantage and overall earnings.
Tennant Co Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted sustained order growth and strategic product launches, contributing to a positive outlook despite a decline in net sales and challenges in international markets. Strong performance in the Americas and successful new product introductions support the reaffirmed full-year guidance.Q2-2025 Updates
Positive Updates
Sustained Order Growth
Enterprise-level order rates increased by 4% compared to the prior year quarter, marking the fifth consecutive quarter of order growth. Year-to-date orders grew 8%.
Strong Performance in the Americas
Orders in the Americas increased by 9% compared to the prior year, with North America experiencing double-digit order growth.
Successful New Product Introductions
The X6 ROVR midsized robotic scrubber was launched successfully, contributing to AMR sales accounting for 6% of enterprise net sales.
Cash Flow and Liquidity Strength
Net cash provided by operating activities was $22.5 million, a $3.9 million increase compared to the prior year period. Tennant's liquidity remains strong with a cash and cash equivalents balance of $80.1 million.
Entry into the Outdoor Sweeping Market
Launch of the Z50 Citadel Outdoor Sweeper, expanding Tennant's addressable market and introducing new customer opportunities.
Negative Updates
Decline in Net Sales
Net sales of $318.6 million represented a 3.7% decrease compared to the prior year, with organic sales declining by 4.5%.
Challenges in International Markets
Pockets of weakness were observed in international markets, with sales declines in EMEA and APAC, particularly due to competitive pricing in China.
Drop in Net Income
GAAP net income decreased to $20.2 million from $27.9 million in the prior year period, impacted by volume declines and higher-margin backlog reductions.
Company Guidance
During Tennant Company's Second Quarter 2025 Earnings Conference Call, the company reaffirmed its full-year guidance despite facing challenges such as a 4.5% organic sales decline and macroeconomic uncertainties, including tariff-related pressures. The call highlighted a robust year-to-date order growth of 8%, with a book-to-bill ratio above one, driven by a strong 9% order increase in the Americas, particularly in North America. Tennant achieved a 16% EBITDA margin, supported by pricing initiatives that contributed a 1.8% impact at the enterprise level. Additionally, AMR sales rose to 6% of enterprise net sales, with over 10,000 units deployed. Despite challenges in EMEA and APAC, Tennant remains confident in achieving its 2025 targets, projecting net sales between $1.210 billion and $1.250 billion, GAAP EPS of $3.80 to $4.30, and adjusted EPS of $5.70 to $6.20, with adjusted EBITDA expected to range from $196 million to $209 million.Tennant Co Financial Statement Overview
Summary
Tennant Co demonstrates stable profitability with decent margins and a solid balance sheet. However, the decline in revenue growth and challenges in cash flow conversion present potential risks.Income Statement
Tennant Co's income statement shows mixed performance. The TTM data indicates a decline in revenue growth rate at -0.98%, which is concerning. However, the company maintains a decent gross profit margin of 41.8% and a net profit margin of 4.8%, indicating stable profitability. The EBIT and EBITDA margins are also reasonable at 7.4% and 10.8%, respectively, although they have decreased compared to the previous year. Overall, while profitability is stable, the negative revenue growth is a risk factor.65
Positive
Balance Sheet
The balance sheet reflects a solid financial position with a debt-to-equity ratio of 0.38, which is a positive indicator of financial stability. The return on equity (ROE) is 9.5%, showing a moderate return on shareholders' investments. The equity ratio stands at 52.5%, suggesting a balanced capital structure. While the company has reduced its leverage over time, the ROE has also decreased, indicating potential challenges in generating returns.70
Positive
Cash Flow
Cash flow analysis reveals a mixed picture. The free cash flow growth rate is positive at 7.19%, indicating improved cash generation. However, the operating cash flow to net income ratio is relatively low at 0.33, suggesting potential issues in converting income into cash. The free cash flow to net income ratio is 0.73, which is reasonable but indicates room for improvement in cash flow efficiency.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.25B | 1.29B | 1.24B | 1.09B | 1.09B | 1.00B |
| Gross Profit | 523.90M | 550.00M | 527.80M | 420.90M | 438.00M | 407.80M |
| EBITDA | 134.90M | 175.20M | 188.40M | 136.30M | 137.00M | 117.10M |
| Net Income | 60.70M | 83.70M | 109.50M | 66.30M | 64.90M | 33.70M |
Balance Sheet | ||||||
| Total Assets | 1.24B | 1.19B | 1.11B | 1.09B | 1.06B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 80.10M | 99.60M | 117.10M | 77.40M | 123.60M | 141.00M |
| Total Debt | 247.50M | 254.30M | 242.40M | 317.40M | 293.00M | 337.20M |
| Total Liabilities | 587.80M | 568.00M | 535.10M | 613.00M | 626.60M | 676.50M |
| Stockholders Equity | 651.90M | 620.80M | 577.00M | 470.80M | 433.80M | 404.80M |
Cash Flow | ||||||
| Free Cash Flow | 65.60M | 68.30M | 164.40M | -54.40M | 46.20M | 103.80M |
| Operating Cash Flow | 90.30M | 89.70M | 188.40M | -25.10M | 69.40M | 133.80M |
| Investing Cash Flow | -24.10M | -78.40M | -23.20M | -24.50M | 1.70M | -29.90M |
| Financing Cash Flow | -70.40M | -25.20M | -122.60M | 8.10M | -84.50M | -42.80M |
Tennant Co Technical Analysis
Positive
82.44
Price Trends
81.77
Positive
78.34
Positive
79.90
Positive
Market Momentum
0.02
Positive
52.58
Neutral
47.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TNC, the sentiment is Positive. The current price of 82.44 is above the 20-day moving average (MA) of 81.92, above the 50-day MA of 81.77, and above the 200-day MA of 79.90, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 52.58 is Neutral, neither overbought nor oversold. The STOCH value of 47.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TNC.
Tennant Co Risk Analysis
Tennant Co disclosed 18 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | 1.78B | 51.18 | 3.83% | 0.65% | -5.41% | 17.47% | |
70 Outperform | 871.59M | 17.16 | 10.52% | ― | -2.16% | 9.41% | |
69 Neutral | 2.47B | 44.12 | 7.84% | 0.60% | 9.64% | -24.68% | |
69 Neutral | 1.15B | 22.08 | 13.03% | 1.66% | 2.60% | 51.33% | |
68 Neutral | $1.50B | 25.24 | 9.51% | 1.45% | -0.38% | -44.93% | |
56 Neutral | 1.70B | -99.57 | -1.19% | 3.56% | -7.93% | 91.44% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
TNC
Tennant Co
82.44
-8.33
-9.18%
GRC
Gorman-Rupp Company
44.55
6.88
18.26%
HI
Hillenbrand
25.31
-0.91
-3.47%
SXI
Standex International
214.67
37.79
21.36%
HLIO
Helios Technologies
55.61
11.76
26.82%
THR
Thermon Group Holdings
27.09
-2.90
-9.67%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.