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Twin Disc Inc. (TWIN)
NASDAQ:TWIN
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Twin Disc (TWIN) AI Stock Analysis

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TWIN

Twin Disc

(NASDAQ:TWIN)

Rating:68Neutral
Price Target:
$12.00
▼(-7.83% Downside)
Twin Disc's overall score reflects strong sales growth and strategic positioning in the defense sector, as highlighted in the earnings call. However, profitability challenges and valuation concerns weigh on the score. Technical indicators show bullish momentum, but overbought conditions suggest caution.

Twin Disc (TWIN) vs. SPDR S&P 500 ETF (SPY)

Twin Disc Business Overview & Revenue Model

Company DescriptionTwin Disc, Inc. is a leading manufacturer of power transmission equipment, primarily serving the marine and industrial sectors. Founded in 1918 and headquartered in Racine, Wisconsin, the company specializes in producing a range of products including marine gears, hydraulic components, and other advanced mechanical systems. Twin Disc's offerings are widely used in commercial marine applications, such as workboats and pleasure craft, as well as in various industrial applications, including oil and gas, construction, and agriculture.
How the Company Makes MoneyTwin Disc generates revenue primarily through the sale of its power transmission products and systems. The company operates in two main segments: the marine segment, which includes marine transmissions and controls for boats, and the industrial segment, which encompasses hydraulic clutches and drives for various industrial applications. Key revenue streams include direct sales to original equipment manufacturers (OEMs) and aftermarket sales for existing installations. Significant partnerships with major OEMs in the marine and industrial markets further enhance its revenue potential. Additionally, Twin Disc benefits from a strong aftermarket service component, providing maintenance and replacement parts that contribute to ongoing revenue. The company’s diverse product range and strategic focus on high-performance applications position it well to capitalize on growing demand in its sectors.

Twin Disc Earnings Call Summary

Earnings Call Date:Aug 21, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Oct 31, 2025
Earnings Call Sentiment Neutral
The earnings call for Twin Disc Inc. presented a mix of strong sales growth and strategic advancements in the defense and marine sectors, alongside challenges in the oil and gas market and increased expenses. Despite a net loss for the year, the company's growth in defense and strategic integrations indicate a positive outlook.
Q4-2025 Updates
Positive Updates
Strong Year-End Financial Performance
Sales for the fiscal year reached $340.7 million, marking a top line growth of 15.5%. The fourth quarter alone saw sales grow 14.5% year-over-year to $96.7 million.
Defense Market Expansion
Orders related to defense products grew approximately 45% versus fiscal '24, now making up nearly 15% of the total backlog. The company has a $50 million to $75 million defense-related pipeline.
Marine and Propulsion Systems Growth
Sales in Marine and Propulsion Systems grew 12.2% to $53 million in the fourth quarter, supported by robust activity in workboats and government contracts.
Industrial Segment Growth
The Industrial segment saw strong growth with fourth quarter sales rising 82% year-over-year, supported by strength in Katsa's industrial parts business.
Strategic Acquisitions
Meaningful progress was made in integrating the acquisitions of Katsa and Kobelt, expanding capabilities and broadening the customer base.
Negative Updates
Decline in Oil and Gas Activity
Organic net sales declined due to reduced activity in oil and gas markets, particularly in China, with oil and gas revenue falling to around 8% of total revenue.
Increased ME&A Expenses
ME&A expenses increased to $24.6 million in Q4 compared to $20.4 million last year, reflecting the addition of acquisitions and ongoing wage and professional services inflation.
Lower Aftermarket Sales in Land-Based Transmissions
Aftermarket sales in land-based transmissions were down year-over-year at $3 million compared to $5.5 million in the fourth quarter of fiscal '24.
Net Loss for the Full Year
The company reported a full-year net loss of $1.9 million compared to a net income of $11 million in fiscal '24.
Company Guidance
During the Twin Disc Inc. fiscal fourth quarter and full year 2025 conference call, the company provided a comprehensive guidance highlighting robust growth and strategic developments. Twin Disc reported a 15.5% increase in full-year sales to $340.7 million, driven by strong demand across its portfolio, particularly in Marine and Propulsion Systems and defense-related products. The fourth quarter alone saw a 14.5% year-over-year sales increase to $96.7 million, despite a decline in organic net sales due to reduced oil and gas market activity. The company also noted a 45% growth in defense-related orders, which now constitute nearly 15% of the total backlog, with a defense-related pipeline valued between $50 million and $75 million. EBITDA was reported at $19 million for the year, impacted by nonoperating and noncash items. Looking forward, Twin Disc emphasized its growth trajectory, especially in the defense market, leveraging its strategic acquisitions of Katsa and Kobelt to expand capabilities and customer base. The company remains focused on disciplined capital management and aims to achieve its 2030 objectives of $500 million in revenue and consistent free cash flow conversion of at least 60%, supported by a robust backlog of approximately $150 million.

Twin Disc Financial Statement Overview

Summary
Twin Disc shows steady revenue growth but struggles with profitability, evidenced by a negative net profit margin and declining cash flow. The balance sheet is strong with low leverage, but negative returns on equity highlight inefficiencies.
Income Statement
65
Positive
Twin Disc has shown a steady revenue growth rate of 3.73% in the latest year, indicating positive momentum. However, the net profit margin is negative at -0.56%, reflecting challenges in converting revenue into profit. The gross profit margin is stable at 27.21%, but the EBIT and EBITDA margins have decreased compared to previous years, suggesting pressure on operational efficiency.
Balance Sheet
70
Positive
The company's debt-to-equity ratio is relatively low at 0.30, indicating a conservative leverage position. However, the return on equity is negative at -1.15%, highlighting inefficiencies in generating returns for shareholders. The equity ratio is strong, suggesting a solid capital structure.
Cash Flow
60
Neutral
Free cash flow has declined by 15.28%, which is a concern for liquidity. The operating cash flow to net income ratio is 0.19, indicating moderate cash generation relative to earnings. The free cash flow to net income ratio is 0.37, showing some ability to convert earnings into cash flow, but with room for improvement.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue340.74M340.74M295.13M276.96M242.91M218.58M
Gross Profit92.73M92.73M83.32M74.33M68.81M50.86M
EBITDA19.31M19.31M27.05M26.39M24.64M4.16M
Net Income-1.89M-1.89M10.99M10.38M10.47M-29.72M
Balance Sheet
Total Assets355.56M355.56M312.06M289.18M276.52M275.41M
Cash, Cash Equivalents and Short-Term Investments16.11M16.11M20.07M13.26M12.52M12.34M
Total Debt49.20M49.20M48.22M36.74M54.26M44.97M
Total Liabilities191.17M191.17M157.00M143.66M145.34M144.75M
Stockholders Equity164.01M164.01M154.70M145.09M130.78M130.21M
Cash Flow
Free Cash Flow8.82M8.82M25.01M14.98M-13.04M2.06M
Operating Cash Flow23.98M23.98M33.72M22.90M-8.31M6.53M
Investing Cash Flow-32.90M-32.90M-32.07M-408.00K5.90M-2.74M
Financing Cash Flow-965.00K-965.00K2.75M-19.51M4.05M-4.32M

Twin Disc Technical Analysis

Technical Analysis Sentiment
Positive
Last Price13.02
Price Trends
50DMA
9.71
Positive
100DMA
8.49
Positive
200DMA
9.27
Positive
Market Momentum
MACD
1.11
Negative
RSI
73.53
Negative
STOCH
94.73
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 13.02 is above the 20-day moving average (MA) of 10.76, above the 50-day MA of 9.71, and above the 200-day MA of 9.27, indicating a bullish trend. The MACD of 1.11 indicates Negative momentum. The RSI at 73.53 is Negative, neither overbought nor oversold. The STOCH value of 94.73 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 19 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Neutral
$154.64M16.6816.62%3.84%13.91%
68
Neutral
$185.19M29.82-1.19%1.23%15.45%-117.28%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
48
Neutral
$108.53M-6.59%1.15%-6.13%-6.61%
48
Neutral
$46.20M30.96-3.73%-18.38%-128.11%
44
Neutral
$19.96M-1.47%34.35%93.12%
41
Neutral
$2.38M
4.77%7.98%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TWIN
Twin Disc
13.02
1.50
13.02%
BWEN
Broadwind Energy
2.05
-0.05
-2.38%
CVV
CVD Equipment
2.77
-0.64
-18.77%
HURC
Hurco Companies
17.93
0.87
5.10%
TAYD
Taylor Devices
47.91
-6.15
-11.38%
TPICQ
TPI Composites
0.04
-3.44
-98.85%

Twin Disc Corporate Events

Business Operations and StrategyFinancial Disclosures
Twin Disc to Present at Investor Meetings
Neutral
Aug 26, 2025

Twin Disc, a company involved in the manufacturing sector, announced that its executive officers plan to present materials at investor meetings and conferences starting August 27, 2025. These materials, which include non-GAAP financial information, will be available on the company’s website. The company emphasizes that these non-GAAP measures provide additional insights into their core business operations, although they should not replace GAAP-compliant results. The announcement highlights the company’s efforts to engage with investors and analysts, potentially impacting its market positioning and stakeholder perceptions.

Business Operations and StrategyFinancial Disclosures
Twin Disc Reports FY 2025 Results with Sales Growth
Neutral
Aug 21, 2025

On August 21, 2025, Twin Disc announced its fiscal year 2025 results, highlighting a 15.5% increase in sales to $340.7 million and a net loss of $1.9 million. Despite challenges in the oil and gas sector, the company saw strong demand in marine and propulsion systems, and industrial segments. The company reported a healthy backlog, increased operating cash flow, and continued strategic acquisitions, enhancing its global footprint and market diversification. CEO John H. Batten emphasized the company’s resilience and strategic positioning for future growth, supported by a robust defense market presence and ongoing integration efforts.

Business Operations and StrategyFinancial Disclosures
Twin Disc to Present at Investor Meetings
Neutral
Aug 21, 2025

Twin Disc, a company involved in manufacturing, is preparing to present materials at investor meetings and conferences starting August 21, 2025. These presentations will include non-GAAP financial measures to provide additional insights into the company’s performance. The company emphasizes that these non-GAAP measures are not a substitute for GAAP results and warns against undue reliance on forward-looking statements due to potential risks and uncertainties.

Executive/Board ChangesBusiness Operations and Strategy
Twin Disc Sets 2026 Executive Compensation Plan
Neutral
Aug 12, 2025

On August 6, 2025, Twin Disc‘s Compensation and Human Capital Committee approved the base salaries and fiscal 2026 bonus targets for its principal executive officers, with no increase for CEO John H. Batten and a 4.2% increase for CFO Jeffrey S. Knutson. The committee also awarded restricted and performance stock awards under the Omnibus Incentive Plan, with specific performance objectives set for the three-year period ending June 30, 2028. These decisions reflect the company’s strategic focus on aligning executive compensation with performance metrics, potentially impacting its operational efficiency and stakeholder value.

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.Date of analysis: Aug 25, 2025