Twin Disc Inc. (TWIN)
NASDAQ:TWIN
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Twin Disc
(NASDAQ:TWIN)
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Rating:63Neutral
Price Target:
$15.50
▼(-9.30% Downside)
Action:ReiteratedDate:02/19/26
The score is driven primarily by improved but still uneven financial quality (thin operating margins and weak recent free-cash-flow conversion), alongside a balanced earnings outlook where record backlog/defense demand offsets near-term tariff and EBITDA pressure. Technicals are moderately constructive and valuation is reasonable, providing additional support.
Positive Factors
Record backlog and defense pipeline
A record $175.3M backlog and a >$50M defense pipeline provide multi-quarter revenue visibility and reduce near-term demand cyclicality. Defense and naval awards are typically longer-duration, supporting steadier production schedules, aftermarket follow‑on work and durable revenue conversion over 2–6 months and beyond.
Negative Factors
Thin operating margins and earnings volatility
An operating margin near 1.2% leaves little buffer against input cost shifts, tariffs, or discrete operational disruptions. Historical swings (including a FY2025 net loss) show earnings are sensitive to mix, one‑offs and execution, which raises the risk that short-term shocks translate into multi-quarter profitability pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog and defense pipeline
A record $175.3M backlog and a >$50M defense pipeline provide multi-quarter revenue visibility and reduce near-term demand cyclicality. Defense and naval awards are typically longer-duration, supporting steadier production schedules, aftermarket follow‑on work and durable revenue conversion over 2–6 months and beyond.
Read all positive factors
Twin Disc (TWIN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$259.73M
Dividend Yield0.95%
Average Volume (3M)26.93K
Price to Earnings (P/E)2.7
Beta (1Y)1.28
Revenue Growth14.24%
EPS Growth-96.24%
CountryUS
Employees910
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.55
Shares Outstanding14,421,658
10 Day Avg. Volume28,734
30 Day Avg. Volume26,927
Financial Highlights & Ratios
PEG Ratio0.55
Price to Book (P/B)0.75
Price to Sales (P/S)0.36
P/FCF Ratio13.87
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue0.84
Enterprise Value/Gross Profit3.02
Enterprise Value/Ebitda14.09
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.73
Revenue Forecast (FY)$370.90M
Twin Disc Business Overview & Revenue Model
Company Description
Twin Disc, Incorporated designs, manufactures, and sells marine and heavy duty off-highway power transmission equipment worldwide. It operates through two segments, Manufacturing and Distribution. The company's products include marine transmission...
How the Company Makes Money
Twin Disc primarily makes money by manufacturing and selling engineered drivetrain and marine propulsion products to OEMs and end users. Key revenue streams typically include: (1) Original equipment sales—sales of new marine transmissions, propuls...
Twin Disc Key Performance Indicators (KPIs)
Twin Disc Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Neutral
The call presented a mixed but balanced picture: structurally positive elements include a record backlog (+41.4% YoY), strong defense demand (pipeline >$50M, backlog up 18% sequentially), and industrial growth (+22% YoY). However, near-term operating challenges are notable — organic revenue declined ~7.9%, EBITDA fell 25% YoY, tariff headwinds (~3% of cost of sales) and working capital/inventory increases pressured cash flow. Management outlined credible mitigation actions (footprint moves, assembly relocation to tariff-advantaged locations) and expects improvements as shipment patterns normalize and mitigation takes effect, with some benefits expected in FY27. Given the comparable weight of meaningful operational headwinds and strong structural positives, the net tone is balanced.Positive Updates
Record Backlog and Strong Defense Demand
Backlog reached a record $175.3 million, up 41.4% year-over-year and 7% sequentially. Defense-related backlog grew 18% sequentially and the defense pipeline exceeds $50 million, driven by naval, autonomous vessel, and NATO land-based programs.
Negative Updates
Organic Revenue Decline
On an organic basis (adjusting for M&A and FX), revenue decreased approximately 7.9% year-over-year in the quarter, driven in part by shipment delays as customers timed orders around tariffs.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Backlog and Strong Defense Demand
Backlog reached a record $175.3 million, up 41.4% year-over-year and 7% sequentially. Defense-related backlog grew 18% sequentially and the defense pipeline exceeds $50 million, driven by naval, autonomous vessel, and NATO land-based programs.
Read all positive updates
Company Guidance
Management said tariff-related impacts (about 3% of cost of sales in Q2) should moderate in coming quarters as mix improves and mitigation actions — pricing discipline, operational/footprint changes and moving RF/ARF assembly to Lufkin (tariff-advantaged, expected to remove roughly 10 percentage points of gross‑margin drag on those units by fiscal 2027) — take effect; they pointed to a record backlog of $175.3M (up 41.4% YoY, +7% sequentially) with defense backlog up 18% sequentially and a defense pipeline exceeding $50M providing visibility into 2026 and supporting stronger H2 revenue. In Q2 they reported $90.2M sales (+0.3% YoY; organic -7.9%), $22.4M gross profit (+3.2%), 24.8% gross margin (+70 bps), $4.7M EBITDA (-25% YoY), net income $22.4M ($1.55/share, reflecting a $21.8M tax benefit), ME&A $20.7M, free cash flow $1.2M, inventory as a percent of backlog improved ~400 bps, net debt $29M and cash $14.9M (-6.4%); management expects backlog conversion to improve working capital and cash generation as shipment patterns normalize.Twin Disc Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
74
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 348.10M | 340.74M | 295.13M | 276.96M | 242.91M | 218.58M |
| Gross Profit | 97.03M | 92.73M | 83.32M | 74.33M | 68.81M | 50.86M |
| EBITDA | 20.79M | 19.31M | 26.79M | 26.08M | 24.28M | 3.76M |
| Net Income | 21.80M | -1.89M | 10.99M | 10.38M | 10.47M | -29.72M |
Balance Sheet | ||||||
| Total Assets | 384.01M | 355.56M | 312.06M | 289.18M | 276.52M | 275.41M |
| Cash, Cash Equivalents and Short-Term Investments | 14.89M | 16.11M | 20.07M | 13.26M | 12.52M | 12.34M |
| Total Debt | 47.96M | 49.20M | 48.22M | 29.44M | 47.12M | 44.97M |
| Total Liabilities | 198.84M | 191.17M | 157.00M | 143.66M | 145.34M | 144.75M |
| Stockholders Equity | 184.53M | 164.01M | 154.70M | 145.09M | 130.78M | 130.21M |
Cash Flow | ||||||
| Free Cash Flow | -70.00K | 8.82M | 25.01M | 14.98M | -13.04M | 2.06M |
| Operating Cash Flow | 16.70M | 23.98M | 33.72M | 22.90M | -8.31M | 6.53M |
| Investing Cash Flow | -34.54M | -32.90M | -32.07M | -408.00K | 5.90M | -2.74M |
| Financing Cash Flow | 12.64M | -965.00K | 2.75M | -19.51M | 4.05M | -4.32M |
Twin Disc Technical Analysis
Positive
17.09
Price Trends
16.66
Positive
16.53
Positive
14.37
Positive
Market Momentum
0.37
Negative
64.83
Neutral
92.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWIN, the sentiment is Positive. The current price of 17.09 is above the 20-day moving average (MA) of 15.89, above the 50-day MA of 16.66, and above the 200-day MA of 14.37, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 64.83 is Neutral, neither overbought nor oversold. The STOCH value of 92.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TWIN.
Twin Disc Risk Analysis
Twin Disc disclosed 18 risk factors in its most recent earnings report. Twin Disc 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
Twin Disc Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $6.02B | 111.03 | 2.69% | 0.56% | 6.44% | 101.24% | |
70 Outperform | $4.56B | 29.38 | 11.30% | 1.06% | 5.06% | -22.73% | |
69 Neutral | $3.87B | 33.07 | 11.32% | 0.46% | -0.96% | -11.55% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $259.73M | 2.69 | 13.25% | 0.95% | 14.24% | -96.24% | |
60 Neutral | $12.04B | 50.02 | 6.19% | ― | 5.52% | 9.03% |
* Industrials Sector Average
TWIN
Twin Disc
18.02
11.29
167.84%
NPO
Enpro
278.15
131.77
90.03%
FELE
Franklin Electric Co
103.10
15.19
17.29%
GNRC
Generac Holdings
211.87
98.84
87.45%
KAI
Kadant
332.15
14.16
4.45%
Twin Disc Corporate Events
Business Operations and StrategyFinancial Disclosures
Twin Disc posts Q2 2026 results with record backlog
Positive
Feb 4, 2026
On February 4, 2026, Twin Disc reported fiscal second-quarter 2026 results for the period ended December 26, 2025, with sales essentially flat year over year at $90.2 million but supported by strong demand in marine and propulsion systems and a re...
Financial DisclosuresRegulatory Filings and Compliance
Twin Disc Updates Investor Presentation and Discloses Materials
Neutral
Feb 4, 2026
Twin Disc said its executive officers plan to present updated investor materials at meetings with investors, analysts and conferences on or after February 4, 2026, and that the same materials will be made available on the company’s website. ...
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.