Transcat’s Q4 Results Beat Expectations; Shares Dip

Transcat, Inc. (TRNS) reported better-than-expected fiscal Q4 results. The company provides calibration and laboratory instrument services globally. However, shares of Transcat declined almost 2% to close at $47.47 on May 19.

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Total revenue of $48.8 million surpassed the Street’s estimates of $46.2 million and jumped 6.6% from the year-ago period.

Earnings soared 27% to $0.42 per share, beating consensus estimates of $0.32 per share.

Service segment revenue increased 15.8% year-over-year to $29 million, including $1.4 million from acquisitions. Revenues in the distribution segment declined 4.6% year-over-year to $19.8 million, owing to the persistent effects of the COVID-19 pandemic.

Transcat CEO Lee D. Rudow said, “We enter fiscal 2022 with a strong balance sheet, sustainable Service segment gross margins and an active M&A pipeline. We are confident that our disciplined focus on highly-regulated end markets and our new customer pipeline positions us well for continued strong organic growth.” (See Transcat stock analysis on TipRanks)

On March 29, Sidoti analyst Mitra Ramgopal downgraded the stock’s rating to Hold from Buy and reiterated a price target of $54.00 (13.8% upside potential).

Ramgopal believes that the current price “largely reflects” the growth prospects of Transcat through fiscal year 2023.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 Buys versus 1 Hold. The average analyst price target of $53.67 implies 13.1% upside potential to current levels. Shares have increased 54.6% over the past six months.

Transcat scores a 6 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market averages.