Titan International (TWI) AI Stock Analysis

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Titan International

(NYSE:TWI)

50Neutral

Titan International's stock is moderately weak due to financial challenges, especially in profitability and cash flow. Technical indicators show bearish momentum, compounded by valuation concerns with a negative P/E ratio. Despite some positive outlook from the earnings call, operational and market challenges remain significant.

Positive Factors

Acquisition

The Carlstar acquisition expands Titan International's product portfolio, allowing them to serve a broader range of customers.

Market Positioning

Titan International is the leader in Agricultural and other tires & wheels, indicating strong market positioning.

Technology

Low side wall tires are highlighted for their compelling use case, offering significant fuel economy and yield benefits.

Negative Factors

Market Conditions

TWI, the leader in Agricultural and other tires & wheels, has seen its stock decline nearly 50% YTD as core end-markets deteriorated, but a return to growth could be less than a year away as US farm incomes may inflect in 2025.

Stock Performance

Titan International's stock price has declined nearly 50% as core end-markets have deteriorated.

Titan International (TWI) vs. S&P 500 (SPY)

Market Cap

$474.60M

Dividend YieldN/A

Average Volume (3M)821.67K

Price to Earnings (P/E)―

Beta (1Y)1.47

Revenue Growth1.32%

EPS Growth-104.92%

CountryUS

Employees8,303

SectorIndustrials

Sector Strength72

IndustryAgricultural - Machinery

Share Statistics

EPS (TTM)-0.06

Shares Outstanding63,197,710

10 Day Avg. Volume542,450

30 Day Avg. Volume821,671

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.30

Price to Cash Flow (P/CF)15.80

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$10.67

Price Target Upside43.22% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Titan International Business Overview & Revenue Model

Company DescriptionTitan International, Inc. (TWI) is a leading global manufacturer and supplier of wheels, tires, assemblies, and undercarriage products for off-highway vehicles. The company primarily serves the agricultural, construction, and consumer sectors, providing durable and innovative products designed to enhance the performance and efficiency of machinery in these industries. Titan International operates through a worldwide network of production facilities and distribution channels, ensuring broad market reach and customer support.

How the Company Makes MoneyTitan International generates revenue through the sale of its wide range of products, including wheels, tires, and undercarriage systems, to original equipment manufacturers (OEMs) and aftermarket customers. The company's key revenue streams are anchored in its agricultural and construction segments, which demand high-quality, specialized products for various off-highway vehicles and equipment. Titan International also benefits from strategic partnerships and long-term contracts with major industry players, contributing to a steady flow of orders and strengthening its market position. Additionally, the company invests in research and development to innovate and meet the evolving needs of its customers, further driving sales and enhancing profitability.

Titan International Financial Statement Overview

Summary

Titan International faces challenges with profitability and cash flow generation, as indicated by negative net income and free cash flow. While the balance sheet shows some stability, the increased leverage and inconsistent revenue growth are areas of concern. The company needs to focus on improving efficiency and profitability to enhance financial health.

Income Statement

Neutral

Titan International has shown fluctuating revenue trends with a recent dip in gross profit and net income. The negative net profit margin and declining EBIT margin indicate challenges in profitability. The revenue growth rate is inconsistent, suggesting potential volatility in sales performance.

Balance Sheet

Positive

The company's debt-to-equity ratio has increased, indicating higher leverage, which could pose risks if not managed carefully. However, the equity ratio shows a stable portion of assets financed by equity, and the ROE suggests moderate returns on shareholders' equity, despite recent profitability issues.

Cash Flow

Neutral

Titan's cash flow performance reflects challenges with generating free cash flow, as evidenced by a negative free cash flow growth rate. The operating cash flow to net income ratio indicates issues in converting income into cash, which could impact liquidity if not improved.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.85B	1.82B	2.17B	1.78B	1.26B
	Gross Profit
257.80M	305.85M	360.71M	237.54M	114.32M
	EBIT
33.18M	148.73M	205.80M	85.17M	-16.55M
	EBITDA
105.40M	170.97M	274.05M	130.26M	26.02M
	Net Income Common Stockholders
-5.56M	78.76M	176.30M	49.59M	-65.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
195.97M	220.25M	159.58M	98.11M	117.43M
	Total Assets
1.58B	1.29B	1.28B	1.18B	1.03B
	Total Debt
565.45M	437.26M	445.62M	484.95M	464.70M
	Net Debt
369.47M	217.01M	286.04M	386.84M	347.27M
	Total Liabilities
1.09B	821.83M	901.49M	955.51M	855.62M
	Stockholders Equity
496.07M	467.06M	381.24M	229.30M	179.26M
Cash Flow		Free Cash Flow
75.86M	118.55M	113.70M	-28.08M	35.55M
	Operating Cash Flow
141.49M	179.35M	160.68M	10.73M	57.23M
	Investing Cash Flow
-201.60M	-56.92M	-36.75M	-37.60M	33.22M
	Financing Cash Flow
64.55M	-56.02M	-61.31M	13.95M	-38.56M

Titan International Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price7.45

Price Trends

50DMA

8.04

Negative

100DMA

7.85

Negative

200DMA

7.75

Negative

Market Momentum

MACD

-0.26

Negative

RSI

50.00

Neutral

STOCH

89.91

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWI, the sentiment is Neutral. The current price of 7.45 is above the 20-day moving average (MA) of 7.20, below the 50-day MA of 8.04, and below the 200-day MA of 7.75, indicating a neutral trend. The MACD of -0.26 indicates Negative momentum. The RSI at 50.00 is Neutral, neither overbought nor oversold. The STOCH value of 89.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TWI.

Titan International Risk Analysis

Titan International disclosed 29 risk factors in its most recent earnings report. Titan International reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Titan International Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTW	64 Neutral	$286.02M	5.16	8.98%	―	-2.24%	42.13%
HY	64 Neutral	$699.79M	4.87	32.90%	3.54%	4.61%	11.15%
Sector *	63 Neutral	$4.27B	11.40	5.38%	214.63%	4.11%	-8.98%
SHYF	61 Neutral	$301.05M	666.67	0.18%	2.33%	-4.08%	―
CMCO	61 Neutral	$426.90M	46.51	1.07%	1.88%	-2.02%	-80.76%
WNC	54 Neutral	$424.14M	―	-76.95%	3.19%	-23.25%	-232.48%
TWI	50 Neutral	$474.60M	―	-1.15%	―	1.32%	-104.92%

* Industrials Sector Average

Performance Comparison

TWI

Titan International

7.45

-4.08

-35.39%

CMCO

Columbus Mckinnon

14.92

-26.94

-64.36%

MTW

Manitowoc Company

8.07

-4.75

-37.05%

SHYF

Shyft Group

8.60

-2.48

-22.38%

WNC

Wabash National

10.03

-13.54

-57.45%

Hyster-Yale Materials Handling

39.54

-19.44

-32.96%

Titan International Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -14.66% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted a cautiously optimistic outlook driven by improving farmer sentiment, strong performance in Brazil, and stability in the aftermarket business. However, challenges remain, such as cyclical downturn impacts, European market slowdowns, and increased expenses. The company appears well-positioned for potential growth, particularly if market conditions improve as anticipated.

Highlights

Improved Farmer Sentiment

Positive sentiment among farmers due to supportive government, with corn prices over 15% higher than the previous year, indicating potential for increased farm income and investment.

Brazil Market Growth

Encouraging demand and activity in Brazil, with expectations for increased sales in both OE and aftermarket channels.

Aftermarket Business Stability

Strong performance in the aftermarket segment across all divisions, contributing to a steadier business model during cyclical downturns.

Successful Integration of CarlStar

CarlStar acquisition has expanded product offerings and improved synergy, particularly in the consumer segment.

Strong Cash Flow Management

Maintained strong cash flow and integrated a large acquisition successfully, with a focus on debt reduction in 2025.

Lowlights

Cyclical Downturn Impact

Fourth-quarter revenue was $384 million, with adjusted EBITDA of $9 million, reflecting the seasonal low and cyclical downturn impact.

European Market Challenges

Slow business in the European market with hopes for a turnaround contingent on geopolitical resolutions.

Increased SG&A Expenses

Fourth-quarter SG&A expenses rose to $51 million, attributed to the CarlStar acquisition and distribution costs.

High Effective Tax Rate

Full-year tax expense was around $12 million, with an effective rate of 143%, due to domestic losses and interest expense non-deductibility.

OEM Inventory Management

OEMs continue to manage inventory levels carefully, impacting Titan's near-term sales outlook.

Company Guidance

During the Titan International, Inc. Fourth Quarter 2024 Earnings Call, the company provided guidance for the first quarter of 2025. Revenues are expected to be in the range of $450 million to $500 million, with adjusted EBITDA anticipated at $25 million, marking a sequential improvement from the fourth quarter's revenue of $384 million and adjusted EBITDA of $9 million. The company reported a gross margin of nearly 11% in Q4, with segment-specific gross margins of 9% for agriculture, 6% for earthmoving and construction, and 18% for consumer. Titan's net debt at the end of 2024 was $369 million, equivalent to 2.9 times trailing twelve-month adjusted EBITDA. The company aims to reduce debt and continue smart investments, with lower capital expenditures in 2025. Despite a negative free cash flow of $4.6 million in Q4, Titan expects positive cash flow as the year progresses.

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.