Transcat shares leap on raised price target to $116

On Tuesday, Transcat Inc. (NASDAQ:TRNS) saw its shares surge by 16.2%, significantly outperforming the Russell 2000’s modest 0.1% gain. This surge contributes to the stock’s impressive 19% return over the past week, though InvestingPro analysis indicates the stock is currently trading above its Fair Value. The rise followed H.C. Wainwright’s updated outlook on the company, with analyst Scott Buck increasing the price target to $116 from the previous $106 while maintaining a Buy rating on the stock.

Buck’s commentary highlighted Transcat’s return to more normalized organic growth after experiencing softer trends in the past two quarters. The company’s revenue reached $77.1 million, contributing to its trailing twelve-month revenue of $278.42 million and maintaining a healthy 7.3% growth rate. InvestingPro data shows the company maintains strong financial health with a GOOD overall score and operates with a moderate debt level. This revenue boost was attributed to high single-digit organic growth within the service segment and contributions from recent mergers and acquisitions, including the acquisition of Martin Calibration in December 2024.

Despite rising macroeconomic uncertainty in 2025, Buck believes Transcat is well-positioned to weather potential disruptions due to its work with customers in highly regulated industries, such as those overseen by the FAA, FDA, and Department of Defense. These sectors are expected to maintain regulatory standards, which could provide steady demand for Transcat’s services.

The analyst also noted the possibility of increased onshore manufacturing driven by tariffs, which could open up further opportunities for Transcat. Buck’s assessment suggests that the defensive nature of Transcat’s business should be appealing to investors, particularly given the company’s shares are currently trading well below the 52-week high of $147.12.

In light of these factors, H.C. Wainwright recommends investors to consider the current share price weakness as an opportunity to build positions in Transcat. With a gross profit margin of 32.13% and EBITDA of $36.44 million, InvestingPro subscribers can access 13 additional investment tips and comprehensive analysis through the Pro Research Report, helping inform investment decisions. The firm anticipates long-term revenue growth and continued gross margin improvement for the company, supporting the decision to raise the price target and maintain a bullish stance on the stock.

In other recent news, Transcat Inc. reported its fiscal Q4 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.68, compared to the forecasted $0.65. The company’s revenue also exceeded projections, reaching $77.13 million against a forecast of $76.67 million. Additionally, Transcat completed the strategic acquisition of Martin Calibration for $25 million, marking the largest acquisition in its history. This move is expected to enhance the company’s capabilities and expand its geographical reach, particularly in the Midwest regions of Minneapolis and Chicago.

Transcat’s consolidated revenue for fiscal 2025 grew by 7% to $278.4 million, with service revenue rising by 7% and distribution revenue by 8%. Despite a decline in Q4 net income to $4.5 million from $6.9 million the previous year, the company reported a full-year net income increase of 6% to $14.5 million. The company also highlighted its plans to invest $14-16 million in net capital expenditures for fiscal 2026 and remains focused on strategic acquisitions to drive long-term growth. Analysts from Craig Hallum Capital Group noted the company’s strong performance and its resilience amid macroeconomic uncertainties.

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