Tennant Co (TNC) stock analysis

P/E above its 5-year median

Tennant's P/E of 75.5 is above its own 5-year median of 20.9.

P/E above the industry

Tennant's P/E of 75.5 is above the Industrial and Commercial Machinery and Computer Equipment median of 27.1.

EV/EBITDA above its 5-year median

Tennant's EV/EBITDA of 40.7 is above its 5-year median of 17.1.

P/B below the industry

Tennant's price-to-book of 2.44 is below the Industrial and Commercial Machinery and Computer Equipment median of 2.86.

Trading above fair value

The share price of $76.25 is above our fair value estimate of $34.16.

Margin of safety under 20%

The price is 123% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 3.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -12.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -69.9% over the last twelve months, against a 5-year average of 5.4% a year.

Growing slower than the industry

Revenue grew -2.9% over the last twelve months; the Industrial and Commercial Machinery and Computer Equipment median is 7.6%.

Guidance raised

Tennant raised its 2026 Adjusted effective tax rate** outlook on Nov 2, 2026.

Gross margin slipping

Gross margin was 38.8% over the last twelve months, against 41.8% a year earlier.

Return on equity under 15%

Return on equity was 3.1% over the last twelve months and averaged 14.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 3.6%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Tennant's return on equity of 3.1% is below the Industrial and Commercial Machinery and Computer Equipment median of 3.1%.

Earnings grew over 5 years

Net income grew 5.4% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 1.5% over the last twelve months, against a 5-year average of 6.2%.

Net margin below the industry

Tennant's net margin of 1.5% is below the Industrial and Commercial Machinery and Computer Equipment median of 5.3%.

High debt

Debt is 67.3% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 76.2% five years ago to 67.3%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 4.7% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 2.04 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.04; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Tennant paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Tennant yields 1.6%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Not covered by earnings

Dividends take 119% of net income, leaving little room.

Cash-flow cover

Needs dividends paid and free cash flow.