Spotting Winners: Transcat (NASDAQ:TRNS) And Maintenance and Repair Distributors Stocks In Q3
As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the maintenance and repair distributors industry, including Transcat (NASDAQ:TRNS) and its peers.
Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Maintenance and repair distributors that boast reliable selection and quickly deliver products to customers can benefit from this theme. While e-commerce hasn’t disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to serve customers everywhere. Additionally, maintenance and repair distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand.
The 8 maintenance and repair distributors stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
Thankfully, share prices of the companies have been resilient as they are up 8% on average since the latest earnings results.
Transcat (NASDAQ:TRNS)
Serving the pharmaceutical, industrial manufacturing, energy, and chemical process industries, Transcat (NASDAQ:TRNS) provides measurement instruments and supplies.
Transcat reported revenues of $67.83 million, up 8% year on year. This print fell short of analysts’ expectations by 3.5%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.
“Consolidated revenue was up 8%. Consistent demand in our Calibration Services business was supported by our differentiated value proposition which resonates well in the highly regulated end markets we serve, including life sciences,” commented Lee D. Rudow, President and CEO.
Transcat Total Revenue
Transcat delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 11.2% since reporting and currently trades at $105.90.
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ:DXPE) provides pumps, valves, and other industrial components.
DXP reported revenues of $472.9 million, up 12.8% year on year, outperforming analysts’ expectations by 6.8%. The business had an incredible quarter with a solid beat of analysts’ EPS and EBITDA estimates.
DXP Total Revenue
DXP scored the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 44.4% since reporting. It currently trades at $73.53.
Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions.
Global Industrial reported revenues of $342.4 million, down 3.4% year on year, falling short of analysts’ expectations by 3.1%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 16.5% since the results and currently trades at $27.63.
Founded in NYC’s Little Italy, MSC Industrial Direct (NYSE:MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors
MSC Industrial reported revenues of $952.3 million, down 8% year on year. This result lagged analysts' expectations by 0.8%. Overall, it was a slower quarter as it also logged a miss of analysts’ EPS estimates.
MSC Industrial had the slowest revenue growth among its peers. The stock is up 3.6% since reporting and currently trades at $83.67.
Based in Pittsburgh, WESCO (NYSE:WCC) provides electrical, industrial, and communications products and augments them with services such as supply chain management.
WESCO reported revenues of $5.49 billion, down 2.7% year on year. This print met analysts’ expectations. Taking a step back, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EPS estimates but organic revenue in line with analysts’ estimates.
The stock is up 19.1% since reporting and currently trades at $211.89.
In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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