Transcat Inc (TRNS) stock analysis

P/E above its 5-year median

Transcat's P/E of 284.1 is above its own 5-year median of 61.8.

P/E above the industry

Transcat's P/E of 284.1 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 36.5.

EV/EBITDA above its 5-year median

Transcat's EV/EBITDA of 27.8 is above its 5-year median of 25.3.

P/B above the industry

Transcat's price-to-book of 3.25 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 3.17.

Trading above fair value

The share price of $105.11 is above our fair value estimate of $80.23.

Margin of safety under 20%

The price is 31.0% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 12.9% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -25.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -74.2% over the last twelve months, against a 5-year average of -7.2% a year.

Growing faster than the industry

Revenue grew 20.9% over the last twelve months; the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median is 8.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 32.5% over the last twelve months, against 32.1% a year earlier.

Return on equity under 15%

Return on equity was 1.2% over the last twelve months and averaged 8.3% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 2.0%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Transcat's return on equity of 1.2% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 1.1%.

Earnings shrank over 5 years

Net income shrank 7.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 1.0% over the last twelve months, against a 5-year average of 4.5%.

Net margin above the industry

Transcat's net margin of 1.0% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of -1.3%.

Low debt

Debt is 36.4% of shareholders' equity, under the 40% we consider low.

Debt rising against equity

Debt to equity rose from 26.1% five years ago to 36.4%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 36.3% of total debt.

Interest not well covered

Operating income covers interest expense 2.1 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.49 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.32; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Transcat has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.