What Happened?

Shares of measurement equipment distributor Transcat (NASDAQ:TRNS) fell 23.7% in the afternoon session after the company reported weak fourth-quarter results. Its revenue missed significantly, and its EBITDA fell short of Wall Street's estimates. The company noted that organic sales in the services segment were below historical trends, and customers closed some facilities while operating with reduced staffing levels, which limited the volume of incoming equipment during the December 2024 holiday period. Overall, this was a softer quarter.

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What The Market Is Telling Us

Transcat’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for Transcat and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 13.9% on the news that the company reported underwhelming third-quarter results, with its revenue, EBITDA, and EPS missing Wall Street's estimates. Management attributed the weakness to the deceleration in Service organic revenue growth which fell below historical trends due to a decline in the Nexa cost control and optimization services business. Overall, this was a softer quarter.

Transcat is down 23.9% since the beginning of the year, and at $80.72 per share, it is trading 44% below its 52-week high of $144.07 from July 2024. Investors who bought $1,000 worth of Transcat’s shares 5 years ago would now be looking at an investment worth $2,501.

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