Tennant Co (TNC) AI Stock Analysis

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Tennant Co

(NYSE:TNC)

65Neutral

Tennant Co's overall score of 65 reflects its solid financial performance and reasonable valuation, tempered by technical indicators suggesting bearish momentum. The cautious outlook from the earnings call highlights challenges such as sales decline and economic uncertainties, which weigh on the overall score despite positive strategic initiatives.

Tennant Co (TNC) vs. S&P 500 (SPY)

Market Cap

$1.44B

Dividend Yield1.49%

Average Volume (3M)151.55K

Price to Earnings (P/E)21.5

Beta (1Y)0.96

Revenue Growth1.35%

EPS Growth-40.63%

CountryUS

Employees4,500

SectorIndustrials

Sector Strength91

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)1.12

Shares Outstanding18,653,505

10 Day Avg. Volume124,491

30 Day Avg. Volume151,552

Financial Highlights & Ratios

PEG Ratio-1.08

Price to Book (P/B)2.17

Price to Sales (P/S)0.00

P/FCF Ratio22.04

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$115.00

Price Target Upside49.31% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Tennant Co Business Overview & Revenue Model

Company DescriptionTennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair services, specialty surface coatings, and asset management solutions. It also provides business solutions, such as financing, rental, and leasing programs, as well as machine-to-machine asset management solutions. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IRIS, VLX, IPC, Gaomei, and Rongen brands, as well as private-label brands. Its products are used in retail establishments and distribution centers; factories and warehouses; and public venues, such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, parking lots and streets, and other environments. It markets its products to contract cleaners and businesses through direct sales and service organizations, as well as through a network of authorized distributors. Tennant Company was founded in 1870 and is headquartered in Eden Prairie, Minnesota.

How the Company Makes MoneyTennant Company generates revenue through the sales of its cleaning equipment and related products. The company's primary revenue streams include the sale of floor cleaning machines and outdoor cleaning equipment. Additionally, Tennant earns income from selling parts and consumables, which are essential for the maintenance and operation of its machines. The company also offers service contracts and leasing options, providing customers with flexible solutions to maintain their cleaning equipment. Tennant's revenue is further supported by its global distribution network and strategic partnerships, which enhance its market presence and customer reach.

Tennant Co Financial Statement Overview

Summary

Tennant Co demonstrates solid financial performance with stable profitability and operational efficiency. The income statement, balance sheet, and cash flow show a well-rounded financial stance, although slight revenue and cash flow declines could pose future challenges.

Income Statement

Positive

Tennant Co's income statement shows stable profitability with a solid gross profit margin of 42.1% for TTM. The net profit margin is at 5.4%, indicating healthy bottom-line performance. However, there is a slight revenue decline of 1.6% in the latest TTM compared to the previous year. EBIT and EBITDA margins are decent at 7.7% and 11.3%, respectively, reflecting operational efficiency.

Balance Sheet

Positive

The balance sheet reflects a balanced capital structure with a debt-to-equity ratio of 0.40, indicating moderate leverage. The return on equity stands at 10.95%, showcasing reasonable returns for shareholders. The equity ratio is robust at 52.9%, suggesting a strong equity base relative to total assets. Overall, the balance sheet demonstrates stability and financial strength.

Cash Flow

Positive

Cash flow analysis shows a moderate free cash flow to net income ratio of 0.89, indicating effective cash conversion. The operating cash flow to net income ratio is 1.26, demonstrating strong cash generation capabilities. However, there is a 10.4% decline in free cash flow compared to the previous year, which could impact future investments.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.27B	1.29B	1.24B	1.09B	1.09B	1.00B
	Gross Profit
532.50M	550.00M	527.80M	420.90M	438.00M	407.80M
	EBIT
97.00M	114.30M	138.60M	87.20M	93.70M	63.70M
	EBITDA
142.50M	175.20M	188.40M	136.30M	137.00M	117.10M
	Net Income Common Stockholders
68.40M	83.70M	109.50M	66.30M	64.90M	33.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
88.80M	99.60M	117.10M	77.40M	123.60M	141.00M
	Total Assets
1.15B	1.19B	1.11B	1.09B	1.06B	1.08B
	Total Debt
241.70M	254.30M	242.40M	317.40M	293.00M	337.20M
	Net Debt
152.90M	154.70M	125.30M	240.00M	169.40M	196.20M
	Total Liabilities
535.80M	568.00M	535.10M	613.00M	626.60M	676.50M
	Stockholders Equity
614.60M	620.80M	577.00M	470.80M	433.80M	404.80M
Cash Flow		Free Cash Flow
61.20M	68.30M	164.40M	-54.40M	46.20M	103.80M
	Operating Cash Flow
86.40M	89.70M	188.40M	-25.10M	69.40M	133.80M
	Investing Cash Flow
-24.70M	-78.40M	-23.20M	-24.50M	1.70M	-29.90M
	Financing Cash Flow
-65.80M	-25.20M	-122.60M	8.10M	-84.50M	-42.80M

Tennant Co Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price77.02

Price Trends

50DMA

76.29

Positive

100DMA

80.29

Negative

200DMA

85.51

Negative

Market Momentum

MACD

0.23

Negative

RSI

59.13

Neutral

STOCH

80.42

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TNC, the sentiment is Neutral. The current price of 77.02 is above the 20-day moving average (MA) of 72.54, above the 50-day MA of 76.29, and below the 200-day MA of 85.51, indicating a neutral trend. The MACD of 0.23 indicates Negative momentum. The RSI at 59.13 is Neutral, neither overbought nor oversold. The STOCH value of 80.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TNC.

Tennant Co Risk Analysis

Tennant Co disclosed 18 risk factors in its most recent earnings report. Tennant Co reported the most risks in the “Tech & Innovation” category.

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

Latest Risks Added 0 New Risks

Tennant Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRC	78 Outperform	$1.02B	23.01	12.06%	1.88%	0.92%	21.96%
THR	75 Outperform	$1.02B	22.07	9.75%	―	0.48%	-5.52%
SXI	71 Outperform	$1.89B	30.89	9.29%	0.79%	2.67%	-18.41%
TNC	65 Neutral	$1.44B	21.52	11.04%	1.49%	1.35%	-40.63%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%
HLIO	63 Neutral	$1.09B	29.32	4.27%	1.10%	-5.39%	12.14%
HI	48 Neutral	$1.53B	―	-18.22%	4.12%	0.31%	-423.59%

* Industrials Sector Average

Performance Comparison

TNC

Tennant Co

77.02

-26.13

-25.33%

GRC

Gorman-Rupp Company

38.91

6.41

19.72%

Hillenbrand

21.70

-21.99

-50.33%

SXI

Standex International

156.34

-16.69

-9.65%

HLIO

Helios Technologies

32.66

-20.73

-38.83%

THR

Thermon Group Holdings

30.15

-4.68

-13.44%

Tennant Co Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 6.74%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a balance between positive growth in order rates, strategic investments, and product launches, with challenges in sales decline, margin pressures, and economic uncertainties due to tariffs. The company's efforts to mitigate these issues through pricing and sourcing actions are notable, but the overall outlook remains cautious.

Q1-2025 Updates

Positive Updates

Order Rates Growth

Order rates increased 13% in the first quarter, marking the fourth consecutive quarter of near or above double-digit order growth.

Launch of Clean 360 Program

Tennant introduced the Clean 360 program, offering customers access to AMR solutions through an autonomous subscription model, which includes a machine, software, and maintenance.

Strategic Investments and Product Launches

Investments in go-to-market initiatives and new product development, including the X4 ROVR and the upcoming X6 ROVR launch, are on pace to meet growth targets.

EMEA Growth Despite Challenges

EMEA grew 2% on a constant currency basis, with a positive impact from a recent acquisition in Eastern Europe.

AMR Sales Growth

AMR sales grew 30% over the first quarter of 2024, with AMR accounting for approximately 5% of net sales.

Negative Updates

Organic Sales Decline

Net sales of $290 million reflected an organic decline of 5%, impacted by a challenging comparison due to a previous backlog benefit.

Net Income and Margin Decline

GAAP net income decreased to $13.1 million from $28.4 million in the prior year, with adjusted EBITDA margin falling 360 basis points to 14.1%.

Challenges in APAC

APAC performance was impacted by demand decline in China and signals of slower demand in Australia.

Impact of Tariffs and Economic Uncertainty

Tariffs and trade war contributed to economic uncertainty, with an estimated $40 million impact on COGS for the full year.

Currency Headwinds

Foreign exchange rates negatively impacted sales, particularly in Brazil and EMEA.

Company Guidance

During Tennant Company's first quarter 2025 earnings call, the guidance provided for the remainder of the year included several key financial metrics. The company reaffirmed its guidance for net sales to range between $1.210 billion and $1.250 billion, reflecting an organic sales decline of 1% to 4%. The expected GAAP EPS is between $3.80 and $4.30 per diluted share, while adjusted EPS is projected to be between $5.70 and $6.20 per diluted share, excluding ERP costs and amortization expenses. Adjusted EBITDA is anticipated to range from $196 million to $209 million, with an adjusted EBITDA margin between 16.2% and 16.7%. Capital expenditures are projected to be approximately $20 million, and the adjusted effective tax rate is expected to be between 23% and 27%. Despite challenges such as tariffs and economic uncertainties, the company remains confident in achieving its 2025 guidance through strategic pricing and sourcing actions.

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.