Transcat (TRNS) AI Stock Analysis

• Market Cap: $743.78M
• Dividend Yield: N/A
• Average Volume (3M): 152.73K
• Price to Earnings (P/E): 90.8
• Beta (1Y): 1.05
• Revenue Growth: 11.81%
• EPS Growth: -39.16%
• Country: US
• Employees: 1,104
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.26
• Shares Outstanding: 9,332,188
• 10 Day Avg. Volume: 165,588
• 30 Day Avg. Volume: 152,728
• PEG Ratio: -9.64
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 2.42
• P/FCF Ratio: 26.14
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 2.64
• Enterprise Value/Gross Profit: 8.15
• Enterprise Value/Ebitda: 20.31
• 1Y Price Target: $100.00
• Price Target Upside: 30.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.86
• Revenue Forecast (FY): $330.61M

• Rating: 62 Neutral
• Price Target: $83.00 ▲(8.13% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is driven primarily by solid underlying fundamentals and a constructive earnings update (reaffirmed organic growth guidance, strong revenue/margin trends). This is tempered by weaker TTM net/FCF momentum and higher leverage, while valuation is a notable headwind due to the elevated P/E; technicals are neutral overall.

Positive Factors

Consistent Revenue Growth

Nearly 17 years of consecutive quarterly growth shows durable demand and deep client relationships in regulated industries. Consistent organic and acquisition-driven revenue expansion reduces execution risk and supports scale benefits across service and distribution segments.

Margin Expansion

Sustained improvement in gross and EBITDA margins indicates better pricing, higher‑margin rental mix in distribution, and operational leverage from scale. Margin durability supports cash generation and provides buffer to absorb integration or workload onboarding costs over coming quarters.

Strong Operating Cash Generation

Stable, positive operating cash flow backing reported earnings demonstrates underlying cash conversion strength. This durable cash flow finances capex, rental inventory and M&A, and underpins liquidity and the company's ability to invest in service capabilities and technology over the medium term.

Negative Factors

Rising Leverage

Material increase in debt from recent acquisitions reduces financial flexibility and raises interest burden. Higher leverage magnifies downside risk if margins or cash flow soften, and constrains optionality for future bolt‑on M&A or discretionary investments until deleveraging is achieved.

Weak Free Cash Flow Momentum

A sharp drop in FCF momentum suggests higher reinvestment, elevated capex or working capital that limits cash available for deleveraging or returns. Sustained weak FCF growth would hamper balance sheet repair and reduce ability to fund acquisitions without additional leverage.

Acquisition and Succession-Related Earnings Pressure

Large acquisitions increase noncash amortization and add integration risk; combined with succession and one‑time charges, GAAP profitability is depressed. If acquisitions fail to deliver expected synergies or take longer to integrate, reported returns and ROIC could remain pressured.

Transcat Business Overview & Revenue Model

Company Description

Transcat, Inc. provides calibration and laboratory instrument services in the United States, Canada, and internationally. It operates through two segments, Service and Distribution. The Service segment offers calibration, repair, inspection, analytical qualification, preventative maintenance, consulting, and other related services. This segment also provides CalTrak, a proprietary document and asset management software that is used to integrate and manage the workflow of its calibration service centers and customers' assets; and Compliance, Control and Cost, an online customer portal that provides its customers with web-based asset management capability, as well as a safe and secure off-site archive of calibration and other service records. The Distribution segment sells and rents test, measurement, and control instruments for customers' test and measurement instrumentation needs, as well as value added services, such as calibration/certification of equipment purchase, equipment rental, used equipment for sale, and equipment kitting. This segment markets and sells its products through website, digital and print advertising, proactive outbound sales, and an inbound call center. The company provides services and products to highly regulated industries, principally life science, which includes companies in the pharmaceutical, biotechnology, medical device, and other FDA-regulated industries; and additional industries, including aerospace and defense industrial manufacturing, energy and utilities, and other industries that require accuracy in processes and confirmation of the capabilities of their equipment. Transcat, Inc. was incorporated in 1964 and is headquartered in Rochester, New York.

How the Company Makes Money

Transcat generates revenue primarily through two key streams: Calibration Services and Distribution. The Calibration Services segment accounts for a significant portion of the company's revenue by providing essential calibration and repair services to ensure that instruments meet regulatory compliance and industry standards. Additionally, the Distribution segment earns revenue by selling a variety of measurement and test equipment from well-known manufacturers. Transcat also benefits from long-term relationships with clients in regulated industries, which leads to recurring business. The company's strategic partnerships with leading manufacturers further enhance its product offerings and market reach, contributing to its overall earnings.

Transcat Financial Statement Overview

Summary

Strong multi-year revenue growth and improving gross/EBITDA margins support fundamentals, and operating cash flow remains solid. Offsetting this, TTM net profitability has softened, free-cash-flow growth is sharply negative, and leverage has risen meaningfully versus FY2025, increasing financial risk.

Income Statement

Revenue has grown steadily over the multi-year period (from $173.3M in 2021 to $278.4M in FY2025), and TTM (Trailing-Twelve-Months) revenue is higher at $320.4M, indicating continued expansion. Profitability is solid for a distributor: gross margin improved versus earlier years (about 26.6% in 2021 to ~32.8% TTM), while EBITDA margin has generally trended up to ~14.0% TTM. The key weakness is softer bottom-line performance in TTM: net margin (~4.4%) and net income ($9.1M) are down versus FY2025 ($14.5M, ~5.2% margin), suggesting incremental costs, mix, or other pressures despite stable operating margins.

Balance Sheet

Equity and assets have expanded meaningfully (equity from $75.1M in 2021 to $286.9M in FY2025 and $296.8M in TTM), supporting business scale-up. Leverage, however, has moved higher recently: total debt increased to $129.1M in TTM from $57.7M in FY2025, lifting debt relative to equity to ~0.49 (from ~0.20). Returns on equity are currently modest (about 4.7% TTM vs ~5.1% FY2025 and higher levels in earlier years), which, combined with rising leverage, reduces balance-sheet quality compared with the prior year.

Cash Flow

Cash generation is a clear strength: operating cash flow is strong and stable (about $39.3M TTM and $39.0M in FY2025), and operating cash flow exceeds net income (roughly 1.12x TTM), indicating earnings are backed by cash. Free cash flow is positive ($24.9M TTM), but momentum has weakened sharply with TTM free cash flow growth at -94.4% versus positive growth in FY2025, pointing to higher reinvestment needs or working-capital headwinds. Free cash flow also covers only ~63% of net income in TTM, which is adequate but not exceptional.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	320.40M	278.42M	259.48M	230.57M	204.96M	173.34M
Gross Profit	103.84M	89.45M	83.81M	68.36M	58.44M	46.12M
EBITDA	41.69M	37.69M	33.82M	26.86M	23.57M	18.65M
Net Income	9.10M	14.52M	13.65M	10.69M	11.38M	7.79M
Balance Sheet
Total Assets	472.89M	385.24M	287.55M	195.75M	177.76M	132.12M
Cash, Cash Equivalents and Short-Term Investments	3.47M	1.52M	35.18M	1.53M	1.40M	560.00K
Total Debt	134.00M	57.73M	21.54M	64.41M	57.65M	27.52M
Total Liabilities	176.12M	98.36M	62.38M	96.12M	91.59M	57.04M
Stockholders Equity	296.77M	286.88M	225.17M	99.63M	86.18M	75.08M
Cash Flow
Free Cash Flow	24.87M	25.79M	19.34M	7.54M	7.47M	17.02M
Operating Cash Flow	39.28M	38.98M	32.62M	16.95M	17.62M	23.64M
Investing Cash Flow	-98.27M	-84.00M	-41.67M	-18.51M	-39.85M	-10.15M
Financing Cash Flow	57.54M	26.86M	27.40M	876.00K	23.69M	-12.65M

Transcat Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 76.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRNS, the sentiment is Positive. The current price of 76.76 is above the 20-day moving average (MA) of 72.69, above the 50-day MA of 65.59, and above the 200-day MA of 72.87, indicating a bullish trend. The MACD of 4.04 indicates Negative momentum. The RSI at 62.48 is Neutral, neither overbought nor oversold. The STOCH value of 63.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRNS.

Transcat Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GIC	76 Outperform	$1.19B	16.72	24.03%	3.48%	0.16%	2.99%
DXPE	75 Outperform	$2.50B	29.21	19.58%	―	12.76%	36.11%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TRNS	62 Neutral	$743.78M	90.83	2.73%	―	11.81%	-39.16%
DSGR	61 Neutral	$1.38B	-124.08	-1.68%	―	14.46%	-588.82%
EVI	57 Neutral	$267.92M	43.64	3.77%	―	12.63%	-21.23%
TITN	51 Neutral	$451.04M	-7.24	-9.63%	―	-8.92%	-304.76%

Transcat Corporate Events

Transcat grants retention awards amid CEO transition

On January 6, 2026, Transcat’s board compensation committee granted special one-time equity retention awards in the form of restricted stock units to four executive officers, designed to vest on January 6, 2028, contingent on continued employment. Announced publicly on January 8, 2026, these awards are intended to preserve leadership continuity and keep executives focused on operations during the transition prompted by CEO Lee D. Rudow’s previously announced retirement, under which he will remain CEO until March 2026 and then serve in an advisory role through March 2027, a move the board views as critical to ensuring a smooth succession process and maintaining Transcat’s competitive positioning and long-term strategic execution for shareholders.

The most recent analyst rating on (TRNS) stock is a Buy with a $105.00 price target. To see the full list of analyst forecasts on Transcat stock, see the TRNS Stock Forecast page.