Transcat (TRNS)
NASDAQ:TRNS
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Transcat
(NASDAQ:TRNS)
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Rating:61Neutral
Price Target:
$81.00
▲(1.11% Upside)
Action:Reiterated
Date:05/27/26
The score is held back most by weakening recent profitability/cash conversion and a very expensive valuation (high P/E), despite strong multi-year revenue growth. Earnings-call guidance is supportive—expectations for improving service growth and margin normalization help offset the recent margin pressure—while technicals are trend-positive but show mixed momentum.
Positive Factors
Consistent Service Revenue
A long track record of consecutive quarterly service revenue growth demonstrates durable, recurring demand from compliance-driven customers. This stickiness supports predictable revenue streams, high customer retention, and multi-quarter visibility that underpins sustainable organic growth and contracting opportunities.
Negative Factors
Sharp Profitability Compression
A dramatic fall in EBIT/EBITDA margins undermines earnings resilience: lower profitability reduces internal funding for capex and rentals, raises breakeven risk if volumes soften, and increases sensitivity to cost inflation or pricing pressure over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent Service Revenue
A long track record of consecutive quarterly service revenue growth demonstrates durable, recurring demand from compliance-driven customers. This stickiness supports predictable revenue streams, high customer retention, and multi-quarter visibility that underpins sustainable organic growth and contracting opportunities.
Read all positive factors
Transcat Key Performance Indicators (KPIs)
Transcat (TRNS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$789.48M
Dividend YieldN/A
Average Volume (3M)151.14K
Price to Earnings (P/E)171.6
Beta (1Y)1.12
Revenue Growth19.20%
EPS Growth-63.60%
CountryUS
Employees1,104
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)0.71
Shares Outstanding9,340,698
10 Day Avg. Volume197,279
30 Day Avg. Volume151,143
Financial Highlights & Ratios
PEG Ratio-1.96
Price to Book (P/B)2.21
Price to Sales (P/S)2.01
P/FCF Ratio34.05
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue2.75
Enterprise Value/Gross Profit8.43
Enterprise Value/Ebitda23.16
Forecast
1Y Price Target
$101.33Price Target Upside26.49% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)2.07
Revenue Forecast (FY)$354.90M
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, analy...
How the Company Makes Money
Transcat makes money primarily through two revenue streams: Services and Distribution. (1) Services revenue: The company earns fees for calibration and related quality services performed either in Transcat calibration laboratories or at customer s...
Transcat Earnings Call Summary
Earnings Call Date:May 26, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 03, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial picture: strong top-line growth across segments, expanding adjusted EBITDA, margin improvements at the consolidated level, strategic M&A adding geographic reach, and disciplined capital deployment. Near-term challenges include service margin pressure driven by onboarding/start-up costs, a meaningful gap between GAAP and adjusted EPS due to non-operational charges, and working capital investments affecting free cash flow. Management provided clear strategies (operational excellence, AI/technology, focused M&A, rentals growth) and guidance that margins should normalize and improve in fiscal 2027, suggesting confidence in resolving near-term pressures.Positive Updates
Consolidated Revenue Growth
Fourth quarter consolidated revenue of $89.3 million, up 16% year-over-year; full year consolidated revenue of $331.9 million (rounded to $332M), up 19% year-over-year.
Negative Updates
Service Gross Margin Pressure Year-over-Year
Although service gross margins improved sequentially (service gross margin reported at 35.5% in Q4, with Tom noting a ~76-basis-point sequential improvement), service margins remain under pressure year-over-year due to onboarding/start-up costs for new business.
Read all updates
Q4-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Fourth quarter consolidated revenue of $89.3 million, up 16% year-over-year; full year consolidated revenue of $331.9 million (rounded to $332M), up 19% year-over-year.
Read all positive updates
Company Guidance
Management guided that fiscal Q1 should deliver a sequentially higher level of service organic revenue growth than fiscal Q4’s 7% (i.e., >7%), which they said would position the company to achieve high‑single‑digit service organic growth for full‑year FY27; they also expect service gross margins to normalize and improve year‑over‑year in FY27 (Q4 service gross margin was 35.5% with a ~76‑bp sequential improvement). Management reiterated plans to grow the higher‑margin rental business at a low‑double‑digit pace to support distribution, to continue strategic M&A (e.g., SCM Metrology into Latin America), and to drive margin expansion via productivity, automation and technology/AI while relying on a healthy balance sheet (quarter‑end debt $99.5M, $100M revolver availability, leverage ~2.03x) to fund growth.Transcat Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
70
Positive
Cash Flow
62
Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 331.88M | 278.42M | 259.48M | 230.57M | 204.96M |
| Gross Profit | 108.30M | 89.45M | 83.81M | 68.36M | 58.44M |
| EBITDA | 39.44M | 37.69M | 33.82M | 26.86M | 23.57M |
| Net Income | 5.38M | 14.52M | 13.65M | 10.69M | 11.38M |
Balance Sheet | |||||
| Total Assets | 480.49M | 385.24M | 287.55M | 195.75M | 177.76M |
| Cash, Cash Equivalents and Short-Term Investments | 4.94M | 1.52M | 35.18M | 1.53M | 1.40M |
| Total Debt | 128.88M | 57.73M | 21.54M | 64.41M | 57.65M |
| Total Liabilities | 179.87M | 98.36M | 62.38M | 96.12M | 91.59M |
| Stockholders Equity | 300.62M | 286.88M | 225.17M | 99.63M | 86.18M |
Cash Flow | |||||
| Free Cash Flow | 19.55M | 25.79M | 19.34M | 7.54M | 7.47M |
| Operating Cash Flow | 34.85M | 38.98M | 32.62M | 16.95M | 17.62M |
| Investing Cash Flow | -97.82M | -84.00M | -41.67M | -18.51M | -39.85M |
| Financing Cash Flow | 66.50M | 26.86M | 27.40M | 876.00K | 23.69M |
Transcat Technical Analysis
Positive
80.11
Price Trends
76.08
Positive
73.30
Positive
70.64
Positive
Market Momentum
0.70
Negative
63.09
Neutral
86.70
Negative
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 80.11 is above the 20-day moving average (MA) of 75.33, above the 50-day MA of 76.08, and above the 200-day MA of 70.64, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 63.09 is Neutral, neither overbought nor oversold. The STOCH value of 86.70 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRNS.
Transcat Risk Analysis
Transcat disclosed 34 risk factors in its most recent earnings report. Transcat reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Transcat Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $2.25B | 25.59 | 17.90% | ― | 10.48% | 11.27% | |
65 Neutral | $1.16B | 15.46 | 23.95% | 3.48% | 7.23% | 19.38% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $789.48M | 171.63 | 1.55% | ― | 19.20% | -63.60% | |
55 Neutral | $508.61M | -9.17 | -9.00% | ― | -10.18% | -46.06% | |
50 Neutral | $224.69M | 31.55 | 4.92% | ― | 17.47% | -7.38% | |
50 Neutral | $1.25B | 228.16 | 0.84% | ― | 7.07% | 361.18% |
* Industrials Sector Average
TRNS
Transcat
84.52
-0.92
-1.08%
DXPE
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145.06
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76.26%
EVI
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17.46
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DSGR
Distribution Solutions Group
27.00
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-0.22%
GIC
Global Industrial Company
30.40
5.13
20.29%
TITN
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21.82
3.31
17.88%
Transcat Corporate Events
Business Operations and StrategyExecutive/Board Changes
Transcat Enhances COO Compensation to Support Performance Goals
Positive
May 19, 2026
On May 13, 2026, Transcat’s board compensation committee approved a compensation increase for Chief Operating Officer Michael W. West, retroactive to March 29, 2026, for the fiscal year ending March 27, 2027. The package sets his annual base...
Business Operations and StrategyExecutive/Board Changes
Transcat Appoints Jaime Irick as New President and CEO
Positive
Mar 9, 2026
On March 6, 2026, Transcat’s board appointed industrial and technology veteran Jaime Irick as president and chief executive officer, with his tenure and board service to begin on March 29, 2026, succeeding long-time CEO Lee D. Rudow, who wil...
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.