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Titan Machinery (TITN)
:TITN
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Titan Machinery
(NASDAQ:TITN)58Neutral
Positive Factors
Earnings and Profitability
Higher-than-modeled gross profit contributed positively to earnings per share.
Inventory Management
Stock performance is expected to improve as inventories decline, which should catalyze the shares.
Negative Factors
Agricultural Equipment Demand
The bleak outlook for agricultural equipment demand is at the root of the meaningful valuation discount that TITN is experiencing.
Titan Machinery (TITN) vs. S&P 500 (SPY)
Market Cap
$357.06M
Dividend YieldN/A
Average Volume (3M)358.51K
Price to Earnings (P/E)11.6
Beta (1Y)0.99
Revenue Growth12.25%
EPS Growth-71.53%
CountryUS
Employees3,604
SectorIndustrials
Sector Strength66
IndustryIndustrial Equipment Distributors
Share Statistics
EPS (TTM)1.33
Shares Outstanding23,125,692
10 Day Avg. Volume221,634
30 Day Avg. Volume358,513
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.13
Price to Cash Flow (P/CF)-10.10
P/FCF Ratio16.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.00Price Target Upside61.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Titan Machinery Business Overview & Revenue Model
Company DescriptionTitan Machinery Inc. is a leading dealership group in North America, specializing in the sale and service of agricultural and construction equipment. The company operates a network of full-service stores, offering a wide range of machinery from prominent brands such as Case IH, Case Construction, New Holland Agriculture, and New Holland Construction. Titan Machinery provides comprehensive sales and after-sales support, including parts, maintenance, and repair services, catering to the needs of farmers, contractors, and other equipment users.
How the Company Makes MoneyTitan Machinery makes money primarily through the sale of new and used agricultural and construction equipment. The company's revenue streams also include the provision of repair and maintenance services, which generate income from labor charges and parts sales. Additionally, Titan Machinery benefits from equipment rental services, allowing customers to rent machinery for short-term use. Financial services, such as equipment financing and insurance, further contribute to the company's earnings. Strategic partnerships with leading equipment manufacturers enable Titan Machinery to offer a diverse and competitive product lineup, enhancing its market position and revenue potential.
Titan Machinery Financial Statement Overview
Summary
Titan Machinery exhibits growth in revenue but struggles with profitability and cash flow. Improved leverage is a positive, yet high debt remains a risk. Operational efficiency has declined, impacting returns, and negative cash flow signals potential liquidity issues.Income Statement
Titan Machinery has shown consistent revenue growth, with the most recent TTM (Trailing-Twelve-Months) revenue increasing compared to the previous year. Gross profit margin is solid but has decreased slightly from the prior year, indicating rising costs or pricing pressures. Net profit margin is lower in the TTM data compared to the last annual report, suggesting challenges in maintaining profitability.75
Positive
Balance Sheet
The debt-to-equity ratio has improved, reflecting better leverage management, but remains relatively high, indicating potential risk if market conditions change. Return on equity has decreased, highlighting lower efficiency in generating returns from equity. The equity ratio has improved, suggesting a stronger capital structure relative to assets.60
Neutral
Cash Flow
The company exhibits negative free cash flow, which has worsened in the TTM period, signaling potential liquidity issues. Operating cash flow is negative, indicating challenges in core operations covering expenses. The free cash flow to net income ratio is unfavorable, raising concerns about the company's ability to generate cash from profits.55
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.79B | 2.76B | 2.21B | 1.71B | 1.41B | 1.31B | Gross Profit |
| 473.66M | 531.35M | 439.84M | 332.72M | 261.36M | 250.82M | EBIT |
| 90.51M | 168.84M | 138.32M | 90.18M | 37.41M | 21.33M | EBITDA |
| 129.81M | 200.32M | 167.38M | 124.63M | 73.17M | 64.16M | Net Income Common Stockholders |
| 30.45M | 110.92M | 101.87M | 66.05M | 19.36M | 13.95M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 43.91M | 38.07M | 43.91M | 146.15M | 78.99M | 43.72M | Total Assets |
| 1.19B | 1.99B | 1.19B | 946.67M | 815.79M | 975.34M | Total Debt |
| 413.93M | 1.08B | 413.93M | 281.26M | 296.67M | 523.99M | Net Debt |
| 370.02M | 1.04B | 370.02M | 135.11M | 217.68M | 480.26M | Total Liabilities |
| 652.39M | 1.33B | 652.39M | 511.47M | 444.51M | 630.24M | Stockholders Equity |
| 536.31M | 657.64M | 536.31M | 435.20M | 371.28M | 345.10M |
| Cash Flow | Free Cash Flow | ||||
| -150.79M | -94.64M | -26.39M | 121.29M | 152.91M | -24.06M | Operating Cash Flow |
| -99.56M | -32.28M | 10.82M | 158.92M | 173.00M | 955.00K | Investing Cash Flow |
| -128.76M | -163.37M | -134.06M | -55.20M | -20.30M | -36.47M | Financing Cash Flow |
| 274.50M | 188.58M | 21.96M | -35.34M | -117.94M | 22.87M |
Titan Machinery Technical Analysis
Negative
15.44
Price Trends
16.40
Negative
15.53
Negative
15.62
Negative
Market Momentum
-0.45
Positive
37.63
Neutral
19.19
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TITN, the sentiment is Negative. The current price of 15.44 is below the 20-day moving average (MA) of 17.50, below the 50-day MA of 16.40, and below the 200-day MA of 15.62, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 37.63 is Neutral, neither overbought nor oversold. The STOCH value of 19.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TITN.
Titan Machinery Risk Analysis
Titan Machinery disclosed 30 risk factors in its most recent earnings report. Titan Machinery reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Titan Machinery Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $27.54B | 10.63 | 13.15% | 2.92% | -1.87% | -6.15% | |
77 Outperform | $6.29B | 9.42 | 17.34% | 1.94% | 11.36% | 13.78% | |
74 Outperform | $126.89B | 20.72 | 27.91% | 1.25% | -20.93% | -34.33% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
58 Neutral | $357.06M | 11.61 | 4.68% | ― | 12.25% | -71.53% | |
53 Neutral | $7.22B | 46.40 | -10.11% | 1.20% | -19.08% | -136.41% | |
53 Neutral | $546.03M | ― | -1.15% | ― | 1.32% | -104.92% |
* Industrials Sector Average
Performance Comparison
TITN
Titan Machinery
15.44
-9.92
-39.12%
AGCO
Agco
102.70
-8.07
-7.29%
DE
Deere
499.62
130.14
35.22%
OSK
Oshkosh
98.34
-15.05
-13.27%
TWI
Titan International
8.98
-3.57
-28.45%
KMTUY
Komatsu
29.95
1.41
4.94%
Titan Machinery Earnings Call Summary
Earnings Call Date: Nov 26, 2024 | % Change Since: 0.13% | Next Earnings Date: Mar 27, 2025
Earnings Call Sentiment Negative
The earnings call highlighted some achievements, such as inventory reduction and growth in the Construction segment. However, these were overshadowed by significant challenges including revenue decline, margin compression, and difficulties in the European and Australian markets. The increase in interest expenses further impacted the financial performance.Highlights
Inventory Reduction Success
Titan Machinery successfully reduced their total inventory by approximately $115 million in Q3, with plans to reduce it by $400 million from the $1.3 billion peak by the end of fiscal 2026.
Construction Segment Growth
The Construction segment achieved a 10% same-store sales increase, indicating resilience and stability in this sector.
Optimism in Construction Outlook
The federal infrastructure bill and improved equipment availability are providing healthy support for the long-term outlook of the Construction segment.
Lowlights
Decrease in Total Revenue
Total revenue decreased by 2.1% to $679.8 million compared to the prior year period, driven by a 10.5% same-store sales decrease due to lower demand for equipment purchases.
Significant Margin Compression
Gross profit margin contracted by 360 basis points year-over-year to 16.3%, primarily due to lower equipment margins and proactive inventory management strategies.
Challenges in European and Australian Markets
European operations faced severe drought conditions, particularly in Romania, while Australia experienced below-average rainfall and early frost, negatively impacting yields and demand.
Decreased Agriculture Segment Performance
Agriculture segment sales decreased by 9.3% to $482 million with a pre-tax income drop to $1.9 million from $35.1 million in the prior year.
Increased Interest Expenses
Floorplan and other interest expenses rose to $14.3 million from $5.5 million in the prior year, impacting net income.
Company Guidance
During the Titan Machinery Inc. Q3 2025 earnings call, the company provided detailed guidance on various financial metrics. The total revenue for the quarter was reported at $679.8 million, marking a 2.1% decrease compared to the previous year, with same-store sales dropping by 10.5%. Gross profit stood at $110 million, with a margin contraction of 360 basis points to 16.3%, primarily due to lower equipment margins. The Agriculture segment saw a sales decrease of 9.3% to $482 million, while the Construction segment experienced a 10% increase in same-store sales to $85.3 million. However, the Europe segment faced a significant sales decline of 26.8% due to adverse weather conditions. The company managed to reduce its total inventory by approximately $115 million, with a focus on reducing equipment inventory by around $400 million from its $1.3 billion peak. Looking ahead, Titan expects further equipment margin compression and anticipates adjusted diluted EPS to range from a loss of $0.25 per share to earnings of $0.25 per share for fiscal 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.