Twin Disc (TWIN) AI Stock Analysis

• Market Cap: $103.83M
• Dividend Yield: 2.22%
• Average Volume (3M): 56.27K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.84
• Revenue Growth: 9.23%
• EPS Growth: -16.27%
• Country: US
• Employees: 910
• Sector: Industrials
• Sector Strength: 75
• Industry: Industrial - Machinery
• EPS (TTM): 0.67
• Shares Outstanding: 14,145,862
• 10 Day Avg. Volume: 58,757
• 30 Day Avg. Volume: 56,271
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.84
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.29
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $12.00
• Price Target Upside: 63.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Overall, Twin Disc demonstrates strong financial performance with significant revenue growth and a solid balance sheet. While the technical analysis indicates some caution due to current price trends, the company's attractive valuation, strategic acquisitions, and focus on innovation provide a positive outlook. Investors should consider the potential for improved operational efficiencies and the impact of recent acquisitions.

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 through the sale of its power transmission products and systems. The company's key revenue streams include marine products, such as transmissions and controls for boats and ships, and industrial products, which encompass power take-offs and hydraulic systems used in construction, agriculture, and energy sectors. Twin Disc also offers aftermarket services, including spare parts and maintenance support, which contribute to its revenue. The company's earnings are supported by its global distribution network and strategic partnerships with original equipment manufacturers (OEMs), enabling it to reach diverse markets and maintain strong customer relationships.

Twin Disc Financial Statement Overview

Summary

Twin Disc shows solid financial performance with revenue growth and improved profitability. The balance sheet is stable with a conservative leverage profile, and cash flow management is strong, though there is room for operational efficiency improvements.

Income Statement

Twin Disc has demonstrated solid revenue growth and profitability improvements. The TTM (Trailing-Twelve-Months) revenue of $321.4 million shows a notable increase from the previous year. The gross profit margin improved to 27.1%, and the net profit margin is now at 2.9%, reflecting better cost management. However, EBIT and EBITDA margins indicate room for further operational efficiency improvements.

Balance Sheet

The debt-to-equity ratio stands at 0.28, indicating a conservative leverage profile. ROE for the TTM is 6.4%, showing profitability against equity. The equity ratio is 47.8%, highlighting a healthy balance between assets and equity. While there is stability, further enhancement in equity growth and asset utilization could strengthen the position.

Cash Flow

Free cash flow has decreased in the TTM, but the operating cash flow to net income ratio is favorable at 1.88, indicating strong cash generation capabilities. The free cash flow to net income ratio is 1.28, showing effective cash conversion. Continued focus on capital expenditure and cash management will be crucial.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
295.13M	276.96M	242.91M	218.58M	246.84M
	Gross Profit
83.32M	74.33M	68.81M	50.86M	55.71M
	EBIT
11.48M	16.06M	11.04M	-8.30M	-9.14M
	EBITDA
27.05M	22.23M	21.34M	4.16M	-30.13M
	Net Income Common Stockholders
10.99M	10.38M	8.10M	-20.70M	-39.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
20.07M	13.26M	12.52M	12.34M	10.69M
	Total Assets
312.06M	289.18M	276.52M	275.41M	294.13M
	Total Debt
48.22M	29.44M	47.12M	44.97M	56.08M
	Net Debt
28.15M	16.18M	34.60M	32.63M	45.39M
	Total Liabilities
157.00M	143.66M	145.34M	144.75M	154.17M
	Stockholders Equity
154.70M	145.09M	130.78M	130.21M	139.39M
Cash Flow		Free Cash Flow
25.01M	14.98M	-13.04M	2.06M	-1.08M
	Operating Cash Flow
33.72M	22.90M	-8.31M	6.53M	9.62M
	Investing Cash Flow
-32.07M	-408.00K	5.90M	-2.74M	-10.62M
	Financing Cash Flow
2.75M	-19.51M	4.05M	-4.32M	-1.05M

Twin Disc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWIN, the sentiment is Neutral. The current price of 7.34 is above the 20-day moving average (MA) of 6.92, below the 50-day MA of 7.72, and below the 200-day MA of 10.95, indicating a neutral trend. The MACD of -0.26 indicates Negative momentum. The RSI at 51.78 is Neutral, neither overbought nor oversold. The STOCH value of 83.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TWIN.

Twin Disc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TWIN	72 Outperform	$103.83M	10.92	6.42%	2.22%	9.23%	-16.27%
TAYD	70 Neutral	$96.52M	13.37	15.52%	―	-1.02%	-7.87%
BWEN	64 Neutral	$34.82M	29.27	2.00%	―	-29.65%	-84.94%
Sector *	63 Neutral	$4.23B	11.54	5.34%	209.77%	4.14%	-9.49%
HURC	49 Neutral	$92.14M	―	-9.12%	0.96%	-13.86%	-1497.93%
CVV	45 Neutral	$19.96M	―	-7.36%	―	11.47%	54.59%
TPIC	40 Underperform	$43.53M	―	77.71%	―	-8.18%	-20.81%

Twin Disc Corporate Events

Twin Disc Acquires Kobelt to Enhance Product Portfolio

On February 14, 2025, Twin Disc entered into a new Credit Agreement with Bank of Montreal, refinancing a prior agreement, and acquired all shares of Kobelt Manufacturing Co. Ltd. The acquisition, completed for CAD $23,397,932, is expected to enhance Twin Disc’s product portfolio and expand its market reach in the marine and industrial sectors. Kobelt’s integration is anticipated to be immediately accretive to Twin Disc’s earnings and will benefit from Twin Disc’s global presence. Kobelt brings extensive after-sales services and specialized capabilities, contributing to Twin Disc’s positioning as an integrated systems supplier.

Twin Disc Reports Strong Q2 Sales Growth for 2025

On February 5, 2025, Twin Disc, Inc. reported a 23.2% increase in sales year-over-year for the second quarter of fiscal 2025, totaling $89.9 million, driven by both organic growth and the acquisition of Katsa Oy. The company’s net income was $0.9 million, and EBITDA rose by 13.5% to $6.3 million. Despite challenges in the Asian oil and gas markets, the marine and industrial segments showed significant growth, and the company maintained a strong backlog of $124 million. Twin Disc aims to continue its strategic focus on niche capabilities and growth in hybrid and electric solutions.

Twin Disc Shares Non-GAAP Insights at Investor Meetings

Twin Disc’s executive officers are set to present materials at investor meetings and conferences from February 5, 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 valuable insights into their core business performance, despite not being directly comparable to GAAP measures or those used by other companies.