Value
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 8.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.6 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 42.8x
- ▸PEG: 0.16
TRNS · Why this verdict
Why Transcat (TRNS) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Transcat shows excellent cash conversion at 392% of FCF-to-net-income and a perfect Piotroski F-Score of 9 out of 9, reflecting strong fundamental quality. Quality breakdown | The Piotroski F-Score should hold at 8 or above and cash conversion should stay elevated over the next 12 months. | →Stable |
| CounterCash conversion metrics can be temporarily inflated by working-capital timing, so a Piotroski score this high may not be sustainable if the underlying business slows. | ||
Transcat is ranked an industry growth leader relative to its peer group in the calibration and compliance services space. Peer-rank breakdown | The growth peer-rank should remain in the top tier of the industry over the next 12 months. | →Stable |
| CounterBeing a peer-relative growth leader in a slow-growing industry doesn't guarantee absolute growth is strong enough to justify the stock's 41.6x forward P/E. | ||
Transcat has posted consecutive earnings misses in 2 of the last 4 quarters and is showing negative price momentum, with the engine's momentum gate failing at 2.6 versus a 4.5 threshold. Bear case | The company should post an earnings beat and momentum should recover above 4.5 over the next few months. | →Stable |
| CounterOne of the last four quarters beat by 48.99% surprise, showing the company can still deliver upside surprises even amid a rough recent stretch. | ||
The stock has already reached its analyst target with only -3.3% implied upside, and the engine's asymmetry gate failed at -0.4, reflecting an unfavorable risk/reward setup. Warnings | The asymmetry ratio should turn positive, rising above 1.5, or a higher analyst target should be issued before the setup becomes attractive again. | →Stable |
| CounterA low PEG ratio of 0.15 suggests the stock may still be cheap relative to its growth profile even if the static analyst target has already been reached. | ||
Transcat shows excellent cash conversion at 392% of FCF-to-net-income and a perfect Piotroski F-Score of 9 out of 9, reflecting strong fundamental quality.
→StableQuality breakdown
- Expectation
- The Piotroski F-Score should hold at 8 or above and cash conversion should stay elevated over the next 12 months.
CounterCash conversion metrics can be temporarily inflated by working-capital timing, so a Piotroski score this high may not be sustainable if the underlying business slows.
Transcat is ranked an industry growth leader relative to its peer group in the calibration and compliance services space.
→StablePeer-rank breakdown
- Expectation
- The growth peer-rank should remain in the top tier of the industry over the next 12 months.
CounterBeing a peer-relative growth leader in a slow-growing industry doesn't guarantee absolute growth is strong enough to justify the stock's 41.6x forward P/E.
Transcat has posted consecutive earnings misses in 2 of the last 4 quarters and is showing negative price momentum, with the engine's momentum gate failing at 2.6 versus a 4.5 threshold.
→StableBear case
- Expectation
- The company should post an earnings beat and momentum should recover above 4.5 over the next few months.
CounterOne of the last four quarters beat by 48.99% surprise, showing the company can still deliver upside surprises even amid a rough recent stretch.
The stock has already reached its analyst target with only -3.3% implied upside, and the engine's asymmetry gate failed at -0.4, reflecting an unfavorable risk/reward setup.
→StableWarnings
- Expectation
- The asymmetry ratio should turn positive, rising above 1.5, or a higher analyst target should be issued before the setup becomes attractive again.
CounterA low PEG ratio of 0.15 suggests the stock may still be cheap relative to its growth profile even if the static analyst target has already been reached.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Transcat shows excellent cash conversion, a top Piotroski score, and industry-leading peer growth rank, but consecutive earnings misses, negative momentum, and an already-reached analyst target argue for a cautious near-term stance.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.6 |
| ROA | 1.5 |
| Gross margin | 2.5 |
| Op margin | 2.4 |
| Net margin | 0.8 |
| Current ratio | 8.0 |
| FCF quality | 10.0 |
| Moat | 5.6 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 392% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
8.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 10.0 |
Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 1.7 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.1 |
| erm sentiment | 5.0 |
Insider
7.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.5 |
| quality rank | 2.7 |
| growth rank | 8.6 |
- ▸Industry growth leader
Technical
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.9 |
| support resistance | 6.8 |
| 52w position | 8.6 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.4 |
| days to cover | 8.3 |
| volatility | 1.4 |
| put call | 10.0 |
| implied vol | 4.2 |
| beta | 8.9 |
| debt equity | 8.2 |
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 5.2 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULT|L3:NEWS_MOD=-1Passed (6)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.2=NEGATIVE
Warning (2)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.25
Upside
-2.3%
Downside
8.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.9B<$5B
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:4.6>=4.5. Top dim: Growth at 8.2; weakest: Catalyst at 4.1. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 8.2, Technical at 8.1, and Insider at 7.5; the weakest are Catalyst at 4.1, Value at 4.5, and Momentum at 4.6. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.25 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Cash Conversion Piotroski
Trip ifPiotroski F-Score falls below 6 out of 9 or cash conversion drops below 150% of FCF-to-net-income.
- P2Industry Growth Leader
Trip ifThe company's growth peer-rank falls below the 50th percentile of its industry.
- P3Consecutive Earnings Misses Negative Momentum
Trip ifCompany posts a beat with surprise above 5% at the 2026-08-03 report and momentum rises above 4.5.
- P4Analyst Target Reached Negative Asymmetry
Trip ifAsymmetry ratio rises above 1.5.