TransAct Technologies TACT shares have gained 15.9% in the past three months, outperforming the Zacks Computer and Technology sector, the Zacks Computer - peripheral Equipment industry and the S&P 500 index.

This significant outperformance reflects TACT’s continued success in expanding its product offerings, securing high-value deals and maintaining robust financial growth. With such impressive gains already on the board, the question remains — Should investors buy, sell or hold the stock now?

TransAct Expands Its Market Share With BOHA

TransAct is riding on the back of its food service technology business where it is making strides with BOHA Terminal 2. The device is an international success with TACT, adding 13 new customers with the BOHA Terminal 2 in the second quarter of 2024. TransAct is expecting 3,500 units of BOHA Terminal 2 to be sold in the remaining part of 2024.

BOHA Terminal 2 offers customers compliance with the Food and Drug Administration, making this a unique selling point of the device. TACT is receiving positive feedback from both existing and prospective customers, with many existing customers upgrading to BOHA Terminal 2 from the older AccuDate and original BOHA terminals.

The BOHA platform is entering new markets where customers are appreciating its unique offerings and cost savings. This is also reflected in TACT’s revenues. In the second quarter of 2024, TransAct Technologies reported revenues of $11.6 million, which increased 9% sequentially.

TransAct Technologies 3 Month Performance

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TransAct Fares Well Against Competition

TransAct faces stiff competition in all of its end markets. However, competition in the Casino and Gaming market and POS automation has seen a surge due to the re-entry of major competitors. In both the end markets, TransAct’s competitors have been using a price competition strategy to gain market share, causing TACT to lose 40% of sales in the second quarter in POS automation alone.

TACT’s existing competitors in POS Automation include Epson, Star Micronics and Citizen. Casino and Gambling market competitors are JCM Global, Nanoptix, Inc., Custom Engineering SPA and Eurocoin. Food technology service competitors are Digi International Inc. DGII, Avery Dennison Corporation AVY and Ecolab Inc. ECL.

Digi International provides a range of IoT products ranging from Packaging and sorting equipment, food safety equipment like DigiSense, weigh-wrap labelers and many more. On the other hand, Avery Dennison and Ecolab provide solutions, including labeling and food safety solutions. Most of these competitors have greater resources than TACT.

To counter the existing and new competition in these end markets, TransAct is adjusting its prices to maintain its market share. TransAct is also focusing on improving its food service  technology business when its other businesses are suffering. With the launch of innovative products like BOHA Terminal 2, TACT is maintaining a high growth rate in the food service technology annual recurring revenues. In the second quarter of 2024, food service technology recurring revenues were up 12% year over year.

Here's What Investors Should Do

Given the bright prospects of its food service technology business and recovery in other segments, TACT is poised to grow in the future. TransAct has a Value Style score of A, reflecting that the stock is fairly valued. We recommend investors to buy this Zacks Rank #2 (Buy) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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