Twin Disc (TWIN) AI Stock Analysis

• Market Cap: $262.33M
• Dividend Yield: 0.95%
• Average Volume (3M): 26.93K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 1.17
• Revenue Growth: 14.24%
• EPS Growth: -96.24%
• Country: US
• Employees: 910
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 1.55
• Shares Outstanding: 14,421,658
• 10 Day Avg. Volume: 28,734
• 30 Day Avg. Volume: 26,927
• PEG Ratio: 0.55
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.36
• P/FCF Ratio: 13.87
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.82
• Enterprise Value/Gross Profit: 2.95
• Enterprise Value/Ebitda: 13.75
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.86
• Revenue Forecast (FY): $371.00M

• Rating: 63 Neutral
• Price Target: $18.50 ▲(8.25% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 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 & defense pipeline

A record $175.3M backlog and a >$50M defense pipeline provide durable multi‑quarter revenue visibility and reduce near‑term cyclicality. Defense awards and naval/autonomous demand create higher‑confidence revenue conversion that supports planning, capacity utilization and long‑run cash generation.

Diversified OEM + aftermarket model and industrial growth

Twin Disc's mix of OEM contracts and recurring aftermarket parts/services, combined with targeted acquisitions that lifted industrial sales, supports more predictable revenue and higher lifetime customer value. This diversification improves resilience across marine, industrial and defense end markets over cycles.

Manageable leverage and improved returns

Relatively low leverage (D/E ~0.26) and stronger TTM ROE (~13%) provide balance‑sheet flexibility to fund targeted M&A, capex or footprint moves without excessive refinancing risk. This financial headroom supports strategic mitigation actions and long‑term investment in product and operational improvements.

Negative Factors

Thin operating margins & earnings volatility

Very thin operating margins (~1.2% TTM) leave profits highly sensitive to cost shifts, mix and one‑offs. Recent net income was materially influenced by a $21.8M tax benefit rather than operations, highlighting earnings volatility and limited operating leverage to absorb adverse cost or demand shocks over the medium term.

Weak free cash flow conversion

Operating cash flow is positive but free cash flow has deteriorated to roughly breakeven, reflecting elevated working capital and reinvestment. This weaker cash conversion constrains ability to self‑fund acquisitions, pay down debt or return cash to shareholders without relying on backlog conversion or external financing.

Tariff exposure and operational headwinds

Material tariff exposure (about 3% of cost of sales) and shipment timing around tariffs have pressured margins and increased inventories. Although mitigation (footprint and assembly moves) is planned, benefits are phased and some margin relief is expected only by FY27, leaving near‑term structural margin risk and working capital strain.

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 transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. It also provides non-twin disc manufactured products. The company sells its products through a direct sales force and distributor network to customers primarily in the pleasure craft, commercial, and military marine markets, as well as in the energy and natural resources, government, and industrial markets. Twin Disc, Incorporated was founded in 1918 and is headquartered in Racine, Wisconsin.

How the Company Makes Money

Twin Disc generates revenue primarily through the sale of its core products, which include marine transmissions, hydraulic components, and power take-off systems. The company's revenue model is structured around both original equipment manufacturer (OEM) sales and aftermarket parts and services. OEM sales involve direct contracts with manufacturers of marine vessels and industrial equipment, while aftermarket sales provide ongoing revenue through the sale of replacement parts, repairs, and maintenance services. Additionally, Twin Disc benefits from strategic partnerships with various OEMs and distributors, which enhance its market reach and capability to deliver integrated solutions. Factors contributing to its earnings include increased demand in the marine industry, technological advancements in power transmission systems, and a strong focus on research and development to innovate and improve product offerings.

Twin Disc Financial Statement Overview

Summary

Solid multi-year revenue growth and a recovery in profitability (TTM net margin ~6.3%) with manageable leverage (debt-to-equity ~0.26). However, operating margin is very thin (~1.2%), FY2025 included a small net loss, and free cash flow has recently deteriorated to roughly breakeven/slightly negative, lowering financial quality.

Income Statement

Revenue has grown steadily from 2022–2025, with TTM (Trailing-Twelve-Months) revenue up ~7% and multi-year momentum still positive. Profitability has improved meaningfully versus 2021’s loss year, with TTM (Trailing-Twelve-Months) net margin back to ~6.3%. However, operating profitability is thin in the most recent period (TTM operating margin ~1.2%), and the latest annual period (FY2025) showed a small net loss despite strong revenue growth, indicating earnings volatility and sensitivity to costs/mix.

Balance Sheet

Leverage looks manageable for an industrial manufacturer, with debt-to-equity around ~0.26 in TTM (Trailing-Twelve-Months) (and generally in the ~0.20–0.36 range historically). Equity has expanded over time, supporting the balance sheet as the company grew. Returns improved sharply in TTM (Trailing-Twelve-Months) (ROE ~13%), but profitability has not been consistent (negative ROE in FY2025 and 2021), which is the key balance-sheet-related risk if earnings soften again.

Cash Flow

Cash generation has been uneven. While operating cash flow is positive in TTM (Trailing-Twelve-Months) (~$16.7M), free cash flow is essentially breakeven/slightly negative, a major step down from strong positive free cash flow in FY2024. The cash conversion profile is therefore weaker recently, with free cash flow not consistently tracking earnings, suggesting higher working-capital needs and/or elevated reinvestment that reduces cash available to shareholders and debt reduction.

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

• Technical Analysis Sentiment: Positive
• Last Price: 17.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 below the 20-day moving average (MA) of 17.49, below the 50-day MA of 17.21, and above the 200-day MA of 13.04, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 55.75 is Neutral, neither overbought nor oversold. The STOCH value of 65.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TWIN.

Twin Disc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NPO	71 Outperform	$5.50B	135.39	5.80%	0.56%	6.44%	101.24%
FELE	70 Outperform	$4.40B	30.94	10.89%	1.06%	5.06%	-22.73%
KAI	68 Neutral	$3.99B	39.21	11.32%	0.46%	-0.96%	-11.55%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TWIN	63 Neutral	$262.33M	12.02	0.22%	0.95%	14.24%	-96.24%
GNRC	60 Neutral	$13.22B	83.86	6.22%	―	5.52%	9.03%

Twin Disc Corporate Events

Twin Disc posts Q2 2026 results with record backlog

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 recovering industrial segment, boosted by the Kobelt acquisition. Gross margin improved by 70 basis points to 24.8% due largely to the absence of prior-year inventory charges, while net income surged to $22.4 million, or $1.55 per diluted share, primarily reflecting a $21.8 million tax benefit from reversing a domestic valuation allowance, even as EBITDA fell 25% to $4.7 million amid higher operating expenses. The company highlighted tariff-related shipment delays and product-mix pressures that weighed on margins and elevated inventories, but emphasized that orders were deferred rather than lost, underpinning a record six‑month backlog of $175.3 million, expanding defense-related and hybrid propulsion opportunities in the U.S. and Europe, and positive operating and free cash flow generation despite increased debt tied to the Kobelt deal.

The most recent analyst rating on (TWIN) stock is a Hold with a $18.50 price target. To see the full list of analyst forecasts on Twin Disc stock, see the TWIN Stock Forecast page.

Twin Disc Updates Investor Presentation and Discloses Materials

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. The company emphasized that these materials, which include non-GAAP financial measures used internally by management, are being furnished rather than filed to limit associated securities-law liabilities, and cautioned that the non-GAAP metrics are supplemental to GAAP results and may not be comparable to measures used by other companies.

The most recent analyst rating on (TWIN) stock is a Hold with a $18.50 price target. To see the full list of analyst forecasts on Twin Disc stock, see the TWIN Stock Forecast page.