Transcat (TRNS) AI Stock Analysis

• Market Cap: $811.29M
• Dividend Yield: N/A
• Average Volume (3M): 140.38K
• Price to Earnings (P/E): 56.7
• Beta (1Y): 0.73
• Revenue Growth: 7.30%
• EPS Growth: -1.89%
• Country: US
• Employees: 1,104
• Sector: Industrials
• Sector Strength: 87
• Industry: Industrial - Distribution
• EPS (TTM): 0.64
• Shares Outstanding: 9,317,682
• 10 Day Avg. Volume: 122,395
• 30 Day Avg. Volume: 140,376
• PEG Ratio: -3.50
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.65
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 9.46
• Enterprise Value/Ebitda: 5.84
• 1Y Price Target: $100.50
• Price Target Upside: 13.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 70 Outperform
• Price Target: $94.00 ▲(5.80%Upside)

Transcat's strong financial performance and recent acquisition drive its positive outlook, though technical indicators and valuation concerns temper enthusiasm. Challenges in recent earnings and macroeconomic volatility present potential risks.

Positive Factors

Long-term Potential

Growth and margin outlook remain favorable, suggesting potential for long-term revenue growth and margin improvement.

Market Position

Transcat is largely insulated from economic concerns due to its work within highly regulated industries, providing high revenue visibility.

Revenue Growth

The company's December acquisition of Martin Calibration Inc. is expected to contribute as much as $25.0M of annual revenue, before any benefit from cross-selling services.

Negative Factors

Operating Results

Shares of Transcat, Inc. traded lower, down 12.7% following the second consecutive quarter of softer than expected operating results.

Organic Growth

Lower-than-modeled organic growth and Nexa headwinds are likely to pressure TRNS shares.

Risks

Risks include dilution risk if additional capital is raised, customer concentration, acquisition integration risk, increased competition, and share volatility due to small capitalization.

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 makes money primarily through two key revenue streams: Service and Distribution. The Service segment includes calibration, repair, inspection, and laboratory instrument services, which are often performed both on-site and in their accredited laboratories. This segment caters to industries with stringent regulatory requirements, such as pharmaceuticals and aerospace, where equipment accuracy and compliance are critical. The Distribution segment involves the sale of test, measurement, and control instrumentation. This includes acting as a reseller for major equipment manufacturers, providing customers with a wide array of high-quality products. The company leverages significant partnerships with leading equipment manufacturers to enhance its product offerings, thus contributing to its earnings. Additionally, Transcat's strategic focus on expanding its service capabilities and geographic reach helps drive growth in both revenue streams.

Transcat Financial Statement Overview

Summary

Transcat exhibits strong revenue and profit growth with stable margins and effective asset utilization. Balanced leverage and consistent growth in equity and cash flow underpin financial stability, favorable for the industrial distribution sector.

Income Statement

Transcat has demonstrated a strong revenue growth trajectory with consistent increases in total revenue over the years. Gross profit margin has remained stable, indicating efficient cost management. The net profit margin is improving, reflecting better control over expenses and increased profitability. EBIT and EBITDA margins are solid, suggesting a healthy operational performance.

Balance Sheet

The company's balance sheet is robust, with a reasonable debt-to-equity ratio indicating balanced leverage. Stockholders' equity has grown, contributing to a stable equity ratio. Return on equity is strong, driven by consistent net income growth, highlighting effective use of equity financing.

Cash Flow

Operating cash flow has shown a positive trend, supporting strong net income conversion. Free cash flow growth has been steady, though capital expenditures have been significant. The company maintains a solid free cash flow to net income ratio, ensuring liquidity for reinvestment and debt servicing.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	278.42M	259.48M	230.57M	204.96M	173.34M
Gross Profit	89.45M	83.81M	68.36M	58.44M	46.12M
EBITDA	37.69M	33.82M	27.39M	24.61M	18.65M
Net Income	14.52M	13.65M	10.69M	11.38M	7.79M
Balance Sheet
Total Assets	385.24M	287.55M	195.75M	177.76M	132.12M
Cash, Cash Equivalents and Short-Term Investments	1.52M	35.18M	1.53M	1.40M	560.00K
Total Debt	57.73M	21.54M	62.08M	57.65M	27.52M
Total Liabilities	98.36M	62.38M	96.12M	91.59M	57.04M
Stockholders Equity	286.88M	225.17M	99.63M	86.18M	75.08M
Cash Flow
Free Cash Flow	25.79M	19.34M	7.54M	7.47M	17.02M
Operating Cash Flow	38.98M	32.62M	16.95M	17.62M	23.64M
Investing Cash Flow	-84.00M	-41.67M	-18.51M	-39.85M	-10.15M
Financing Cash Flow	26.86M	27.40M	876.00K	23.69M	-12.65M

Transcat Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 88.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 88.85 is above the 20-day moving average (MA) of 81.07, above the 50-day MA of 82.72, and below the 200-day MA of 94.43, indicating a neutral trend. The MACD of 1.15 indicates Negative momentum. The RSI at 64.21 is Neutral, neither overbought nor oversold. The STOCH value of 85.35 is Negative, 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	79 Outperform	$1.41B	18.76	19.45%	―	11.94%	34.08%
GIC	75 Outperform	$1.08B	17.68	22.15%	3.70%	-0.79%	-13.64%
TRNS	70 Outperform	$811.29M	56.71	5.67%	―	7.30%	-1.89%
Sector *	68 Neutral	€2.76B	17.31	9.89%	2.84%	-0.64%	-28.31%
EVI	66 Neutral	$292.05M	46.57	4.71%	―	3.51%	33.35%
DSGR	65 Neutral	$1.33B	1,777.33	0.18%	―	13.91%	―
TITN	52 Neutral	$477.16M	11.08	-9.38%	―	-5.32%	-163.42%

Transcat Corporate Events

Transcat Corporate Controller Announces Retirement Plans

On April 1, 2025, Scott D. Deverell announced his intention to retire from his roles as Corporate Controller and Principal Accounting Officer at Transcat, Inc. He plans to stay with the company until at least October 1, 2025, to ensure a smooth transition.