Transcat (TRNS) AI Stock Analysis

• Market Cap: $589.93M
• Dividend Yield: N/A
• Average Volume (3M): 117.81K
• Price to Earnings (P/E): 52.0
• Beta (1Y): 1.10
• Revenue Growth: 11.81%
• EPS Growth: -39.16%
• Country: US
• Employees: 1,104
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.44
• Shares Outstanding: 9,328,412
• 10 Day Avg. Volume: 79,688
• 30 Day Avg. Volume: 117,812
• 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: 1.42
• Enterprise Value/Revenue: 2.74
• Enterprise Value/Gross Profit: 8.37
• Enterprise Value/Ebitda: 19.57
• 1Y Price Target: $100.00
• Price Target Upside: 58.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $65.00 ▲(2.78% Upside)

The score is driven primarily by solid financial performance (notably strong free-cash-flow growth and healthy cash conversion) and a constructive earnings update featuring strong revenue and EBITDA growth. These positives are tempered by profitability/margin pressure, only moderate technical strength versus longer-term trend weakness, and a stretched valuation with a high P/E and no dividend yield provided.

Positive Factors

Strong free cash flow generation

Sustained, high free cash flow growth improves financial flexibility, enabling ongoing investments in technology, targeted acquisitions, and working capital without heavy reliance on external financing. Over 2–6 months this supports execution of growth plans and balance sheet resilience.

Durable recurring service demand

A long streak of consecutive service growth reflects entrenched demand from regulated industries (pharma, biotech, aerospace) where calibration is mandatory. This recurring, compliance-driven revenue base provides predictable cashflows and high client retention over the medium term.

Acquisition and distribution strength

Successful bolt-on acquisitions and a growing rental/distribution channel materially expand addressable market and scale. When integrated well, these drive cross-sell, improve utilization and lift gross margins, creating a durable growth runway beyond organic trends.

Negative Factors

Net margin compression

Declining net and operating margins constrain the company’s ability to convert top-line growth into shareholder returns. Persistent margin pressure reduces reinvestment capacity and increases sensitivity to cost inflation, impacting sustainable profitability over coming quarters.

Lower ROE and rising leverage

A rising debt ratio with a notably reduced ROE signals less efficient capital deployment and growing financing commitments. Over the medium term this can limit strategic optionality, raise interest cost exposure, and pressure returns unless profitability or asset efficiency improves.

Service margin pressure and project timing risk

Ongoing service margin pressure and delayed project starts reduce revenue visibility and margin stability in a services-heavy business. Structural variability in project timing and slower organic service growth can weaken cash flow predictability and margin recovery over the medium term.

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

Transcat demonstrates solid financial performance with consistent revenue growth and strong cash flow generation. However, profitability margins have faced some pressure, and the return on equity has decreased.

Income Statement

Transcat's income statement shows a consistent revenue growth trend, with a TTM revenue growth rate of 4.98%. The gross profit margin has improved over time, reaching 32.45% in the TTM period. However, the net profit margin has decreased to 3.75% from 5.21% in the previous annual report, indicating some pressure on profitability. The EBIT and EBITDA margins have also declined, suggesting increased operational costs or other expenses.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.49 in the TTM period, which is manageable but has increased from previous periods. The return on equity has decreased to 3.93% in the TTM, indicating a lower return on shareholders' investments. The equity ratio remains stable, showing a solid equity base relative to total assets.

Cash Flow

Transcat's cash flow statement highlights a strong free cash flow growth rate of 28.36% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is healthy at 1.13, suggesting efficient cash conversion. The free cash flow to net income ratio is also robust at 0.63, reflecting good cash retention relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	304.37M	278.42M	259.48M	230.57M	204.96M	173.34M
Gross Profit	99.79M	89.45M	83.81M	68.36M	58.44M	46.12M
EBITDA	42.68M	37.69M	33.82M	26.86M	23.57M	18.65M
Net Income	13.48M	14.52M	13.65M	10.69M	11.38M	7.79M
Balance Sheet
Total Assets	484.89M	385.24M	287.55M	195.75M	177.76M	132.12M
Cash, Cash Equivalents and Short-Term Investments	5.08M	1.52M	35.18M	1.53M	1.40M	560.00K
Total Debt	143.78M	57.73M	21.54M	64.41M	57.65M	27.52M
Total Liabilities	189.47M	98.36M	62.38M	96.12M	91.59M	57.04M
Stockholders Equity	295.42M	286.88M	225.17M	99.63M	86.18M	75.08M
Cash Flow
Free Cash Flow	25.11M	25.79M	19.34M	7.54M	7.47M	17.02M
Operating Cash Flow	39.70M	38.98M	32.62M	16.95M	17.62M	23.64M
Investing Cash Flow	-167.60M	-84.00M	-41.67M	-18.51M	-39.85M	-10.15M
Financing Cash Flow	109.40M	26.86M	27.40M	876.00K	23.69M	-12.65M

Transcat Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 63.24
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 63.24 is above the 20-day moving average (MA) of 58.76, above the 50-day MA of 58.46, and below the 200-day MA of 74.40, indicating a neutral trend. The MACD of 0.81 indicates Negative momentum. The RSI at 61.52 is Neutral, neither overbought nor oversold. The STOCH value of 71.90 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
DXPE	77 Outperform	$1.73B	20.87	19.58%	―	12.76%	36.11%
GIC	77 Outperform	$1.19B	17.56	22.61%	3.48%	0.16%	2.99%
TRNS	67 Neutral	$589.93M	52.02	4.02%	―	11.81%	-39.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DSGR	61 Neutral	$1.36B	-122.46	-1.68%	―	14.46%	-588.82%
EVI	54 Neutral	$375.89M	65.13	3.77%	―	12.63%	-21.23%
TITN	51 Neutral	$378.13M	-5.94	-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.