Transcat (TRNS) AI Stock Analysis

• Market Cap: $723.63M
• Dividend Yield: N/A
• Average Volume (3M): 97.95K
• Price to Earnings (P/E): 54.5
• Beta (1Y): 0.92
• Revenue Growth: 8.49%
• EPS Growth: -15.53%
• Country: US
• Employees: 1,104
• Sector: Industrials
• Sector Strength: 74
• Industry: Industrial - Distribution
• EPS (TTM): 0.59
• Shares Outstanding: 9,319,079
• 10 Day Avg. Volume: 122,653
• 30 Day Avg. Volume: 97,948
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 2.99
• Enterprise Value/Gross Profit: 9.29
• Enterprise Value/Ebitda: 22.10
• 1Y Price Target: $101.00
• Price Target Upside: 29.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 69 Neutral
• Price Target: $88.00 ▲(12.56% Upside)

Transcat's overall stock score reflects strong financial performance and strategic growth initiatives, including successful acquisitions and increased financial flexibility. However, the high P/E ratio suggests overvaluation, and technical indicators point to a bearish trend. The company's ability to leverage its recent acquisitions and manage economic volatility will be crucial for future performance.

Positive Factors

Acquisitions

The acquisition of Essco Calibration Laboratory is anticipated to generate more than $22.0M of annual revenue with high EBITDA margins, enhancing Transcat's financial performance.

Business Strategy

TRNS shares are expected to trade at a premium due to high visibility recurring revenue and profitability.

Earnings

Results beat Street expectations, revenue and margins worth getting excited about.

Negative Factors

Competition

Increased competition from web-based retailers poses a risk to the company's market position.

Risk Factors

Risks include dilution risk from raising additional capital, customer concentration, acquisition integration risk, increased competition, and share volatility.

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 through multiple streams, primarily from the sale of calibration instruments and equipment, calibration services, and related training and consulting. The company earns money by selling a wide range of products from various manufacturers, which are essential for precision measurement and compliance in regulated industries. Additionally, Transcat's calibration services include on-site and in-house calibration of instruments, which provides a recurring revenue stream as clients require ongoing calibration to meet regulatory standards. The company may also benefit from partnerships with leading instrument manufacturers, allowing it to offer exclusive products and services, thereby enhancing its market presence and sales capabilities.

Transcat Financial Statement Overview

Summary

Transcat shows solid revenue growth and stable margins, with a strong balance sheet characterized by low leverage. However, there are challenges in profitability and cash flow generation, as indicated by a decrease in net profit margin and declining free cash flow growth.

Income Statement

Transcat demonstrates solid revenue growth with a 3.49% increase in TTM, supported by a stable gross profit margin of approximately 32%. However, the net profit margin has slightly decreased to 4.64% from 5.21% in the previous annual report, indicating some pressure on profitability. The EBIT and EBITDA margins remain healthy, reflecting efficient operational management.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.22 in TTM, indicating a strong balance sheet with manageable leverage. The return on equity is slightly lower at 4.74% compared to the previous year, suggesting room for improvement in generating returns for shareholders. The equity ratio remains robust, highlighting a solid capital structure.

Cash Flow

Transcat's cash flow performance shows a decline in free cash flow growth by 24.14% in TTM, which could be a concern. However, the operating cash flow to net income ratio of 1.23 indicates good cash conversion efficiency. The free cash flow to net income ratio suggests that the company is still generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	288.14M	278.42M	259.48M	230.57M	204.96M	173.34M
Gross Profit	92.62M	89.45M	83.81M	68.36M	58.44M	46.12M
EBITDA	38.92M	37.69M	33.82M	27.39M	24.61M	18.65M
Net Income	13.37M	14.52M	13.65M	10.69M	11.38M	7.79M
Balance Sheet
Total Assets	392.54M	385.24M	287.55M	195.75M	177.76M	132.12M
Cash, Cash Equivalents and Short-Term Investments	1.86M	1.52M	35.18M	1.53M	1.40M	560.00K
Total Debt	65.72M	57.73M	21.54M	62.08M	57.65M	27.52M
Total Liabilities	100.00M	98.36M	62.38M	96.12M	91.59M	57.04M
Stockholders Equity	292.54M	286.88M	225.17M	99.63M	86.18M	75.08M
Cash Flow
Free Cash Flow	19.56M	25.79M	19.34M	7.54M	7.47M	17.02M
Operating Cash Flow	33.68M	38.98M	32.62M	16.95M	17.62M	23.64M
Investing Cash Flow	-84.50M	-84.00M	-41.67M	-18.51M	-39.85M	-10.15M
Financing Cash Flow	30.74M	26.86M	27.40M	876.00K	23.69M	-12.65M

Transcat Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 78.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRNS, the sentiment is Negative. The current price of 78.18 is below the 20-day moving average (MA) of 83.11, below the 50-day MA of 82.94, and below the 200-day MA of 86.38, indicating a bearish trend. The MACD of -0.37 indicates Positive momentum. The RSI at 41.76 is Neutral, neither overbought nor oversold. The STOCH value of 10.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TRNS.

Transcat Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DXPE	80 Outperform	$1.97B	23.74	20.33%	―	13.93%	48.25%
GIC	79 Outperform	$1.47B	22.37	22.72%	2.72%	-1.58%	-5.62%
DSGR	71 Outperform	$1.48B	380.67	0.65%	―	13.48%	―
TRNS	69 Neutral	$723.63M	54.49	4.82%	―	8.49%	-15.53%
EVI	67 Neutral	$356.35M	57.78	4.71%	―	3.51%	33.35%
Sector *	64 Neutral	$10.73B	15.74	7.56%	2.01%	2.76%	-15.10%
TITN	53 Neutral	$472.08M	11.08	-9.63%	―	-8.12%	-204.81%

Transcat Corporate Events

Transcat Announces CEO Transition Plan

On August 21, 2025, Transcat, Inc. announced a transition plan for CEO Lee D. Rudow, who will retire in March 2026 and then serve as a strategic advisor until 2027. The board has initiated a search for a new CEO, and Rudow’s leadership has been credited with significant growth and acquisitions, positioning the company for a strong future. The company has reiterated a positive outlook for fiscal 2026, highlighting recent financial performance and strategic acquisitions, which are expected to enhance market share and drive organic revenue growth.

Transcat Acquires Essco Calibration for $84 Million

On August 5, 2025, Transcat, Inc. acquired Essco Calibration Laboratory, a leading calibration services provider in New England, for $84 million. This acquisition, supported by a new $150 million credit facility, positions Transcat as a dominant player in the region, enhancing its market presence and offering potential sales and cost synergies. The deal marks Transcat’s largest acquisition to date and follows its purchase of Martin Calibration, contributing significantly to its revenue and expanding its capabilities and geographic reach.

Transcat Secures $150M Credit Facility for Growth

On July 29, 2025, Transcat, Inc. announced the closing of a new five-year $150 million secured credit facility with a syndicate led by M&T Bank, replacing its previous $80 million facility. This new credit facility nearly doubles Transcat’s access to capital, providing greater financial flexibility to support strategic acquisitions and internal growth initiatives, aligning with the company’s aggressive growth trajectory. The facility includes options for revolving loans, swingline loans, and letters of credit, with interest rates tied to the company’s leverage ratio. The arrangement reflects strong confidence from lenders and marks a significant milestone in Transcat’s strategic growth objectives.

Transcat Director Charles Hadeed Announces Retirement

On July 16, 2025, Charles P. Hadeed announced his retirement from the board of directors of Transcat, Inc., effective August 1, 2025. His departure is not due to any disagreements with the company, and Transcat expressed gratitude for his 23 years of service, including 18 years as a director.