Transact Technologies Inc (NASDAQ: TACT)

Sector: Technology Industry: Computer Hardware CIK: 0001017303
Market Cap 39.83 Mn
P/B 1.25
P/E -4.94
P/S 0.79
ROIC (Qtr) -1.40
Div Yield % 0.00
Rev 1y % (Qtr) 21.25
Total Debt (Qtr) 3.44 Mn
Debt/Equity (Qtr) 0.11

About

TransAct Technologies Inc., a prominent player in the development and sale of software-driven technology and printing solutions, operates in the food service technology, point of sale (POS) automation, and casino and gaming industries under the ticker symbol TACT. The company's offerings are designed with a focus on market and customer requirements and are marketed under the brand names BOHA!, AccuDate, Epic, EPICENTRAL, and Ithaca. TransAct's main business activities encompass the design, development, and marketing of software-driven technology...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 9.45M provides robust 2.75x coverage of total debt 3.44M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 20.04M provide 5.83x coverage of short-term debt 3.44M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 41.01M provides 11.93x coverage of total debt 3.44M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 9.45M provides exceptional 30.01x coverage of interest expenses 315000, showing strong debt service capability.
  • Tangible assets of 41.01M provide exceptional 27.60x coverage of deferred revenue 1.49M, showing strong service capability backing.

Bear case

  • Operating cash flow of 9.45M barely covers its investment activities of (1.45M), with a coverage ratio of -6.51, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (1.45M) provide weak support for R&D spending of 6.59M, which is -0.22x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of (829000) show weak coverage of depreciation charges of 700000, with a -1.18 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 9.45M provides minimal 1.37x coverage of tax expenses of 6.92M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Retained earnings of 4.41M provide limited buffer against comprehensive income items of (16000), which is -275.38x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Computer Hardware
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ANET Arista Networks, Inc. 164.72 Bn 49.07 19.50 0.00 Bn
2 DELL Dell Technologies Inc. 86.37 Bn 16.20 0.83 31.24 Bn
3 WDC Western Digital Corp 60.34 Bn 23.73 5.03 4.68 Bn
4 STX Seagate Technology Holdings plc 58.67 Bn 34.25 6.14 4.99 Bn
5 SNDK Sandisk Corp 34.41 Bn -19.78 4.42 1.35 Bn
6 PSTG Pure Storage, Inc. 21.84 Bn 167.52 6.27 0.23 Bn
7 HPQ Hp Inc 21.10 Bn 8.34 0.38 9.67 Bn
8 SMCI Super Micro Computer, Inc. 17.45 Bn 22.01 0.83 4.78 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.57 2.06
EV to Cash from Ops. EV/CFO 2.73 -0.65
EV to Debt EV to Debt 7.50 56.37
EV to EBIT EV/EBIT -31.11 2.89
EV to EBITDA EV/EBITDA -42.35 -1.74
EV to Free Cash Flow [EV/FCF] EV/FCF 3.22 -7.44
EV to Market Cap EV to Market Cap 0.65 7.64
EV to Revenue EV/Rev 0.51 78.30
Price to Book Value [P/B] P/B 1.25 -28.73
Price to Earnings [P/E] P/E -4.94 6.39
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.25
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.30
Dividend per Basic Share Div per Share (Qtr) 0.00 0.27
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.93
Interest Coverage Int. cover (Qtr) -2.63 -105.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -242.45 -11.38
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 76.68 867.36
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 4.71
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -195.48 -189.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 67.40 -40.76
EBIT Growth (1y) % EBIT 1y % (Qtr) 67.18 -117.00
EBT Growth (1y) % EBT 1y % (Qtr) 54.48 -116.68
EPS Growth (1y) % EPS 1y % (Qtr) -326.32 -70.06
FCF Growth (1y) % FCF 1y % (Qtr) 22,957.14 712.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.24 34.90
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.12 0.80
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 1.56 7.26
Current Ratio Curr Ratio (Qtr) 3.05 13.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.11 -3.57
Interest Cover Ratio Int Coverage (Qtr) -2.63 -105.42
Times Interest Earned Times Interest Earned (Qtr) -2.63 -105.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.30 -629.92
EBIT Margin % EBIT Margin % (Qtr) -1.65 -683.67
EBT Margin % EBT Margin % (Qtr) -2.28 -687.58
Gross Margin % Gross Margin % (Qtr) 47.90 34.79
Net Profit Margin % Net Margin % (Qtr) -16.00 -692.43