Transcat (NASDAQ:TRNS) Issues Earnings Results, Misses Expectations By $0.04 EPS

Transcat (NASDAQ:TRNS) issued its earnings results on Tuesday. The scientific and technical instruments company reported $0.26 EPS for the quarter, missing the consensus estimate of $0.30 by ($0.04), FiscalAI reports. The company had revenue of $83.86 million during the quarter, compared to the consensus estimate of $80.99 million. Transcat had a return on equity of 6.81% and a net margin of 3.75%.

Here are the key takeaways from Transcat’s conference call:

• Consolidated results were strong — Q3 revenue rose 26% to $83.9M, consolidated gross profit grew 28%, and Adjusted EBITDA increased 27% to $10.1M, with modest margin expansion.
• Service momentum and guidance — organic service revenue returned to 7% growth (67th consecutive quarter of YoY growth) and management reaffirmed high-single-digit organic service growth guidance for Q4, though near-term margins are pressured by onboarding costs that should normalize over a few quarters.
• Distribution strength from rentals — distribution revenue rose 20% to $30.2M, with gross margin expanding ~330 basis points driven by a higher mix of rental revenue and strong demand in data-center/power-generation product and rental markets.
• Acquisitions increasing scale — the Martin Calibration and Essco Calibration deals expanded Transcat’s footprint and capabilities, are contributing to revenue and synergies, and management says the balance sheet (total debt $99.9M, leverage ~2x, $50.1M revolver capacity) supports continued M&A.
• One-time charges and higher non-cash costs weighed on GAAP results — Q3 reported a net loss of $1.1M driven by acquisition-related amortization, higher interest, and CEO succession one-time charges, with management flagging additional succession-related expenses expected in Q4.

Transcat Stock Performance

Transcat stock opened at $63.33 on Wednesday. Transcat has a fifty-two week low of $50.23 and a fifty-two week high of $97.08. The company has a debt-to-equity ratio of 0.38, a quick ratio of 2.06 and a current ratio of 2.43. The stock has a market cap of $590.87 million, a P/E ratio of 51.91 and a beta of 0.79. The firm’s fifty day moving average price is $59.26 and its 200-day moving average price is $68.44.

Wall Street Analysts Forecast Growth

TRNS has been the subject of a number of analyst reports. Zacks Research upgraded shares of Transcat from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, October 7th. Northland Securities set a $95.00 price target on shares of Transcat in a report on Thursday, October 23rd. Finally, Weiss Ratings restated a “sell (d+)” rating on shares of Transcat in a research report on Monday, December 29th. Two investment analysts have rated the stock with a Strong Buy rating, two have issued a Buy rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, Transcat currently has an average rating of “Buy” and a consensus target price of $105.33.

Institutional Investors Weigh In On Transcat

A number of large investors have recently added to or reduced their stakes in TRNS. CIBC Bancorp USA Inc. purchased a new position in Transcat in the 3rd quarter worth $403,000. Dark Forest Capital Management LP grew its stake in shares of Transcat by 5.4% during the third quarter. Dark Forest Capital Management LP now owns 30,077 shares of the scientific and technical instruments company’s stock valued at $2,202,000 after buying an additional 1,548 shares during the last quarter. Verition Fund Management LLC grew its stake in shares of Transcat by 6.4% during the third quarter. Verition Fund Management LLC now owns 8,982 shares of the scientific and technical instruments company’s stock valued at $657,000 after buying an additional 539 shares during the last quarter. Numerai GP LLC increased its holdings in shares of Transcat by 152.9% in the third quarter. Numerai GP LLC now owns 9,589 shares of the scientific and technical instruments company’s stock worth $702,000 after buying an additional 5,797 shares during the period. Finally, Millennium Management LLC increased its holdings in shares of Transcat by 102.0% in the third quarter. Millennium Management LLC now owns 29,191 shares of the scientific and technical instruments company’s stock worth $2,137,000 after buying an additional 14,740 shares during the period. Hedge funds and other institutional investors own 98.34% of the company’s stock.

Transcat Company Profile

Transcat, Inc (NASDAQ: TRNS) is a leading provider of calibration, laboratory, and metrology services in North America. Founded in 1964 and headquartered in Ronkonkoma, New York, the company specializes in ensuring the accuracy and compliance of measurement instruments across a wide range of industries. Transcat operates a network of ISO/IEC 17025–accredited laboratories and offers on-site field calibration, instrument repair, and preventive maintenance services.

In addition to its calibration services, Transcat distributes precision instrumentation and related software solutions from top manufacturers.