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Twin Disc
(NASDAQ:TWIN)
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Rating:74Outperform
Price Target:
$27.00
▲(14.80% Upside)
Action:Reiterated
Date:08/21/26
The score is driven primarily by solid financial footing (improving leverage and stronger recent cash flow) and favorable valuation (low P/E). Technicals add support with a clear moving-average uptrend and balanced momentum. The latest earnings call remains a net positive (record revenue, stronger cash generation, dividend increase), but margin compression and earnings-quality/comparability headwinds cap the upside.
Positive Factors
Sustained Revenue Growth
Revenue growth across marine, propulsion and land-based transmissions indicates broadening demand and improved market penetration. Continued top-line expansion provides a stronger base for operating leverage, investment and recurring aftermarket opportunities.
Negative Factors
Gross Margin Compression
The sharp margin decline shows that product mix, tariffs and prior-period adjustments can materially affect profitability. Unless higher-margin opportunities offset these pressures, revenue growth may translate into weaker and more volatile operating earnings.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Revenue Growth
Revenue growth across marine, propulsion and land-based transmissions indicates broadening demand and improved market penetration. Continued top-line expansion provides a stronger base for operating leverage, investment and recurring aftermarket opportunities.
Read all positive factors
Twin Disc Key Performance Indicators (KPIs)
Any
Net Sales by Segment
Reveals which business or geographic segments generate the most sales, helping you see where Twin Disc has market strength and where growth or decline is occurring. Shifts in segment mix can indicate strategic changes, exposure to cyclical end markets, or new opportunities for expansion.
Reveals which business or geographic segments generate the most sales, helping you see where Twin Disc has market strength and where growth or decline is occurring. Shifts in segment mix can indicate strategic changes, exposure to cyclical end markets, or new opportunities for expansion.
Data provided by:
The Fly
The FlyTwin Disc (TWIN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$339.22M
Dividend Yield0.73%
Average Volume (3M)26.93K
Price to Earnings (P/E)12.1
Beta (1Y)1.19
Revenue Growth11.90%
EPS GrowthN/A
CountryUS
Employees980
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.92
Shares Outstanding14,422,827
10 Day Avg. Volume28,734
30 Day Avg. Volume26,927
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.49
Price to Sales (P/S)0.86
P/FCF Ratio35.66
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$30.00Price Target Upside27.55% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.7
Revenue Forecast (FY)$396.59M
Twin Disc Business Overview & Revenue Model
Company Description
Twin Disc, Incorporated is a global enterprise specializing in the design, production, and sale of robust power transmission equipment for both marine and heavy-duty off-highway applications. The company operates through two primary divisions: Man...
How the Company Makes Money
Twin Disc makes money by selling engineered power transmission and propulsion products and by supporting those products over their life cycle through aftermarket parts and service. Its revenue model is generally composed of: (1) Original equipment...
Twin Disc Earnings Call Summary
Earnings Call Date:Aug 20, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 30, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial performance: record quarterly revenue, double-digit organic growth, stronger operating income, sizable EBITDA expansion, robust free cash flow, improved leverage, a larger defense backlog, and increased shareholder returns (25% dividend raise). Key challenges were a notable gross margin contraction (≈600 bps) driven by product mix, tariffs and prior-year adjustments, an inventory-accounting change that affects comparability (and produced tax-related benefits), modest weakness in the industrial segment, and timing uncertainty around defense pipeline conversion. On balance, the operational momentum, cash generation, balance-sheet improvement and strategic investments outweigh the margin and comparability headwinds.Positive Updates
Record Quarterly Revenue and Strong Top-Line Growth
Sales of $114.4 million in Q4 (record quarter), up 18.3% year-over-year; full year sales of $381.3 million. Organic revenue increased 15.9% in the quarter and 4.6% for the full year.
Negative Updates
Material Gross Margin Contraction
Gross margin declined approximately 600 basis points to ~26.3% in Q4 (from ~32.3% prior year), driven by adverse product mix, tariff dilution and a favorable $3 million prior-year inventory adjustment that distorted comparables. Management noted tariff dilution alone reduced margins by ~60 basis points in the quarter.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Quarterly Revenue and Strong Top-Line Growth
Sales of $114.4 million in Q4 (record quarter), up 18.3% year-over-year; full year sales of $381.3 million. Organic revenue increased 15.9% in the quarter and 4.6% for the full year.
Read all positive updates
Company Guidance
Management's guidance centered on long-term targets and near-term resource allocation: they reiterated 2030 goals of $500M revenue, 30% gross margin and >60% free‑cash‑flow conversion, approved a 25% dividend increase to $0.05/share, and budgeted FY27 CapEx north of $20M (including a new Finland facility expected to be enclosed by year‑end with full impact in fiscal 2028); they expect defense to be a durable growth driver (defense = 17% of backlog, +56% YoY, with a $30M–$50M defense pipeline as of June 30), while near‑term execution targets include maintaining a strong six‑month backlog of ~$178.3M (flat vs $179.5M), reducing inventory (inventory/backlog = 100%), improving margins from prioritized higher‑margin e‑frac opportunities and tariff mitigation (tariff dilution trimmed ~60 bps of Q4 gross margin), and sustaining financial strength after a record Q4 of $114.4M sales (+18.3% YoY; organic +15.9%), Q4 gross margin ~26.3% (down ~600 bps), Q4 operating income $7.8M (+19.5%), Q4 net income $9.4M ($0.64/sh), Q4 EBITDA $11.1M (9.7% margin, +35.1%), Q4 free cash flow $17.2M, cash ~$16.1M, total debt $31.4M, net debt $13.8M and net leverage of 0.5x (TTM EBITDA $29.9M); they also noted a $30M inventory increase from switching LIFO→FIFO.Twin Disc Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 381.27M | 340.74M | 295.13M | 276.96M | 242.91M |
| Gross Profit | 102.56M | 92.73M | 83.32M | 74.33M | 68.81M |
| EBITDA | 30.42M | 19.31M | 26.79M | 26.08M | 24.28M |
| Net Income | 27.08M | -1.89M | 10.99M | 10.38M | 10.47M |
Balance Sheet | |||||
| Total Assets | 401.25M | 355.56M | 312.06M | 289.18M | 276.52M |
| Cash, Cash Equivalents and Short-Term Investments | 16.03M | 16.11M | 20.07M | 13.26M | 12.52M |
| Total Debt | 45.03M | 49.20M | 48.22M | 29.44M | 47.12M |
| Total Liabilities | 181.31M | 191.17M | 157.00M | 143.66M | 145.34M |
| Stockholders Equity | 219.65M | 164.01M | 154.70M | 145.09M | 130.78M |
Cash Flow | |||||
| Free Cash Flow | 9.19M | 8.82M | 25.01M | 14.98M | -13.04M |
| Operating Cash Flow | 22.90M | 23.98M | 33.72M | 22.90M | -8.31M |
| Investing Cash Flow | -14.15M | -32.90M | -32.07M | -408.00K | 5.90M |
| Financing Cash Flow | -6.59M | -965.00K | 2.75M | -19.51M | 4.05M |
Twin Disc Technical Analysis
Neutral
23.52
Price Trends
23.08
Positive
20.36
Positive
18.36
Positive
Market Momentum
0.20
Positive
49.40
Neutral
39.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWIN, the sentiment is Neutral. The current price of 23.52 is below the 20-day moving average (MA) of 23.83, above the 50-day MA of 23.08, and above the 200-day MA of 18.36, indicating a neutral trend. The MACD of 0.20 indicates Positive momentum. The RSI at 49.40 is Neutral, neither overbought nor oversold. The STOCH value of 39.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TWIN.
Twin Disc Risk Analysis
Twin Disc disclosed 18 risk factors in its most recent earnings report. Twin Disc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Twin Disc Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $3.61B | 32.89 | 11.12% | 0.45% | 12.50% | 3.37% | |
75 Outperform | $4.53B | 29.18 | 11.59% | 1.03% | 7.38% | -10.43% | |
74 Outperform | $339.22M | 12.15 | 14.44% | 0.69% | 11.90% | ― | |
68 Neutral | $6.54B | 148.38 | 2.84% | 0.38% | 13.25% | -48.12% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $12.19B | 44.74 | 9.54% | ― | 0.61% | -27.77% |
* Industrials Sector Average
TWIN
Twin Disc
23.36
10.84
86.58%
NPO
Enpro
308.63
90.98
41.80%
FELE
Franklin Electric Co
102.14
5.33
5.51%
GNRC
Generac Holdings
197.29
12.04
6.50%
KAI
Kadant
305.86
-15.95
-4.96%
Twin Disc Corporate Events
Business Operations and StrategyFinancial Disclosures
Twin Disc Reports Strong Fiscal 2026 Results and Outlook
Positive
Aug 20, 2026
For the fiscal year ended June 30, 2026, Twin Disc reported sales of $381.3 million, up 11.9% year over year, with net income of $27.1 million following a loss in 2025 and EBITDA rising 48% to $29.9 million. The company highlighted strong demand a...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Twin Disc Provides Investor Presentation and Outlook Update
Neutral
Aug 20, 2026
Twin Disc’s executive officers plan to present investor materials beginning August 20, 2026, with the accompanying presentation posted on the company’s website and furnished to the market, though not treated as a formal filing under U....
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Twin Disc Expands Incentive Plan, Adjusts Executive Compensation
Positive
Aug 11, 2026
On August 5, 2026, Twin Disc’s board approved an amended and restated 2021 Omnibus Incentive Plan, lifting the pool of common shares available for equity awards from 1,636,550 to 2,336,550. The plan, administered by the board and its Compens...
Business Operations and StrategyPrivate Placements and Financing
Twin Disc Secures New Long-Term Credit Facilities
Positive
Jul 6, 2026
On June 30, 2026, Twin Disc entered into a new Credit Agreement with Bank of Montreal and JPMorgan Chase Bank that refinances and replaces a February 14, 2025 facility. The lenders provided $30 million in term loans maturing June 30, 2031, with es...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.