Transcat (NASDAQ:TRNS – Get Free Report) announced its quarterly earnings results on Tuesday. The scientific and technical instruments company reported $0.64 EPS for the quarter, topping analysts’ consensus estimates of $0.45 by $0.19, FiscalAI reports. The firm had revenue of $97.09 million during the quarter, compared to analysts’ expectations of $92.46 million. Transcat had a net margin of 0.99% and a return on equity of 5.56%.
Here are the key takeaways from Transcat’s conference call:
- Strong second-quarter growth: Revenue increased 18% to $97.1 million, while adjusted EBITDA rose 23% and adjusted EPS grew 46% to $0.64. Service revenue grew 23%, including 16% organic growth, marking the 70th consecutive quarter of year-over-year service growth.
- Service profitability improved substantially: Service gross margin expanded 220 basis points to 34.4%, helped by operating leverage, pricing, business-mix improvements, and operational-excellence initiatives. Management expects at least 100 basis points of year-over-year service gross-margin expansion in the second half.
- Full-year service outlook was raised: Transcat increased its fiscal 2027 service organic revenue-growth forecast from high single digits to low double digits, citing broad-based demand, market-share gains, improved sales execution, and better visibility into large customer wins.
- Acquisition and rental strategies remain key growth drivers: The Southeastern Biomedical Associates acquisition expands Transcat’s reach in biomedical calibration and hospital networks, while rentals are expected to grow at a low-double-digit rate over time. Distribution margins declined year over year because of lower-margin used-equipment sales, but management expects distribution-margin improvement in the second half.
- Financial capacity supports continued expansion: Operating free cash flow rose 46% to $10.9 million in the first half, while quarter-end debt was $116.9 million, with $33.1 million available under the revolving credit facility and leverage of 2.18 times.
Transcat Price Performance
NASDAQ:TRNS opened at $89.52 on Wednesday. The company has a quick ratio of 2.11, a current ratio of 2.49 and a debt-to-equity ratio of 0.36. The firm has a market cap of $840.59 million, a PE ratio of 241.95 and a beta of 0.61. Transcat has a 12 month low of $50.23 and a 12 month high of $100.00. The company’s 50-day moving average price is $86.10 and its two-hundred day moving average price is $81.83.
Key Transcat News
Here are the key news stories impacting Transcat this week:
- Positive Sentiment: Transcat earned $0.64 per share, up from $0.44 a year earlier and above consensus estimates of roughly $0.42–$0.45. Revenue was $97.09 million, topping the $92.46 million estimate. Zacks earnings report
- Positive Sentiment: The company raised its fiscal 2027 outlook for service organic growth to the low double digits and is targeting at least 100 basis points of service gross-margin expansion in the second half. That outlook points to continued demand and improving service profitability. Outlook update
- Positive Sentiment: Management characterized the quarter as strong, citing double-digit organic service revenue growth and significant service gross-margin expansion. Transcat fiscal second-quarter results
Insider Activity at Transcat
In other Transcat news, Director Craig Cairns purchased 1,050 shares of the firm’s stock in a transaction that occurred on Thursday, August 6th. The shares were acquired at an average cost of $93.97 per share, for a total transaction of $98,668.50. Following the transaction, the director directly owned 1,480 shares in the company, valued at approximately $139,075.60. The trade was a 244.19% increase in their ownership of the stock. The purchase was disclosed in a filing with the SEC, which is available through this link. Also, Director Christopher P. Gillette sold 504 shares of the firm’s stock in a transaction on Friday, August 7th. The shares were sold at an average price of $94.23, for a total value of $47,491.92. Following the sale, the director directly owned 200 shares of the company’s stock, valued at $18,846. This represents a 71.59% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Company insiders own 1.80% of the company’s stock.
Wall Street Analyst Weigh In
A number of brokerages have recently issued reports on TRNS. CJS Securities began coverage on Transcat in a report on Tuesday, October 27th. They issued an “outperform” rating and a $115.00 target price for the company. Weiss Ratings reaffirmed a “sell (d+)” rating on shares of Transcat in a research note on Tuesday, August 25th. Northland Securities upgraded Transcat from a “market perform” rating to an “outperform” rating and set a $95.00 price target on the stock in a research report on Wednesday, October 21st. Finally, Oppenheimer upgraded Transcat from a “market perform” rating to an “outperform” rating and set a $115.00 price objective for the company in a research note on Wednesday. Three equities research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, Transcat has an average rating of “Hold” and an average price target of $108.33.
Check Out Our Latest Stock Report on Transcat
Transcat Company Profile
Transcat, Inc (NASDAQ: TRNS) provides calibration, compliance, and measurement services for organizations that rely on accurate test and measurement equipment. The company supports customers in regulated industries, including life sciences, aerospace and defense, energy, manufacturing, and other industrial markets.
Its service offerings include laboratory and onsite calibration, repair, validation, and asset-management services. Transcat calibrates a broad range of equipment used to measure temperature, pressure, electrical and electronic properties, radio frequency signals, dimensional characteristics, and other technical parameters.
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