Transcat (NASDAQ:TRNS) Posts Earnings Results, Misses Estimates By $0.04 EPS

Transcat (NASDAQ:TRNS) issued its quarterly earnings data 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 business had revenue of $83.86 million for the quarter, compared to analysts’ expectations of $80.99 million. Transcat had a net margin of 3.75% and a return on equity of 6.81%.

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 Price Performance

Shares of NASDAQ TRNS opened at $63.33 on Wednesday. Transcat has a 52 week low of $50.23 and a 52 week high of $97.08. The business’s 50 day moving average price is $59.26 and its 200 day moving average price is $68.44. The company has a quick ratio of 2.06, a current ratio of 2.43 and a debt-to-equity ratio of 0.38. The firm has a market cap of $590.87 million, a P/E ratio of 51.91 and a beta of 0.79.

Institutional Trading of Transcat

Several large investors have recently made changes to their positions in the business. Sei Investments Co. increased its stake in shares of Transcat by 627.4% in the second quarter. Sei Investments Co. now owns 47,203 shares of the scientific and technical instruments company’s stock worth $4,058,000 after acquiring an additional 40,714 shares during the period. BNP Paribas Financial Markets boosted its holdings in Transcat by 352.9% in the third quarter. BNP Paribas Financial Markets now owns 41,553 shares of the scientific and technical instruments company’s stock valued at $3,042,000 after purchasing an additional 32,378 shares during the last quarter. 4D Advisors LLC boosted its holdings in Transcat by 85.7% in the third quarter. 4D Advisors LLC now owns 65,000 shares of the scientific and technical instruments company’s stock valued at $4,758,000 after purchasing an additional 30,000 shares during the last quarter. Ameriprise Financial Inc. grew its position in Transcat by 30.9% during the 2nd quarter. Ameriprise Financial Inc. now owns 116,032 shares of the scientific and technical instruments company’s stock worth $9,974,000 after purchasing an additional 27,372 shares during the period. Finally, Jane Street Group LLC purchased a new position in shares of Transcat during the 1st quarter valued at about $1,674,000. 98.34% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

Several equities research analysts have weighed in on the company. Weiss Ratings reissued a “sell (d+)” rating on shares of Transcat in a report on Monday, December 29th. Zacks Research raised shares of Transcat from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, October 7th. Finally, Northland Securities set a $95.00 target price on shares of Transcat in a research report on Thursday, October 23rd. Two equities research analysts have rated the stock with a Strong Buy rating, two have assigned a Buy rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Buy” and a consensus target price of $105.33.

About Transcat

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.