Trimble Inc. (NASDAQ: TRMB)

Sector: Technology Industry: Scientific & Technical Instruments CIK: 0000864749
Market Cap 19.54 Bn
P/B 3.38
P/E 54.65
P/S 5.43
ROIC (Qtr) 6.81
Div Yield % 0.00
Rev 1y % (Qtr) 2.90
Total Debt (Qtr) 1.39 Bn
Debt/Equity (Qtr) 0.24

About

Trimble Inc., a prominent technology solutions provider, is dedicated to linking workflows and asset lifecycles, thereby fostering a more productive and sustainable future. The company's operations encompass a multitude of industries, including building, civil and infrastructure construction, geospatial, survey and mapping, agriculture, natural resources, utilities, transportation, and government. Trimble's revenue is primarily generated through its software, hardware, and cloud-based solutions, which cater to a diverse customer base that includes...

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Price action

Investment thesis

Bull case

  • Robust free cash flow of 315.20M exceeds capital expenditure of 25.80M by 12.22x, indicating strong organic growth funding capability.
  • R&D investment of 649.70M represents healthy 0.77x of deferred revenue 841.60M, indicating strong future innovation pipeline.
  • Retained earnings of 3.36B provide full 2.41x coverage of long-term debt 1.39B, indicating strong internal capital position.
  • Long-term investments of 622.70M provide solid 124.54x backing of working capital 5M, showing strategic capital allocation.
  • Robust tangible asset base of 2.82B provides 563.02x coverage of working capital 5M, indicating strong operational backing.

Bear case

  • Operating cash flow of 341M barely covers its investment activities of (35M), with a coverage ratio of -9.74, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (35M) provide weak support for R&D spending of 649.70M, which is -0.05x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 232.70M provide limited coverage of acquisition spending of (10.70M), which is -21.75x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 341M provides insufficient coverage of deferred revenue obligations of 841.60M, which is 0.41x, raising concerns about future service delivery capabilities.
  • High receivables of 542.80M relative to inventory of 174.70M (3.11 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Peer comparison

Companies in the Scientific & Technical Instruments
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GRMN Garmin Ltd 38.77 Bn 24.68 5.58 0.16 Bn
2 KEYS Keysight Technologies, Inc. 34.91 Bn 41.07 6.49 2.78 Bn
3 COHR Coherent Corp. 28.91 Bn 244.51 4.78 3.51 Bn
4 TDY Teledyne Technologies Inc 23.87 Bn 29.19 3.98 2.53 Bn
5 TRMB Trimble Inc. 19.54 Bn 54.65 5.43 1.39 Bn
6 FTV Fortive Corp 18.68 Bn 31.02 3.31 3.31 Bn
7 MKSI Mks Inc 10.78 Bn 38.63 2.81 4.55 Bn
8 CGNX Cognex Corp 6.14 Bn 55.76 6.32 0.08 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.30 2.20
EV to Cash from Ops. EV/CFO 60.96 9.84
EV to Debt EV to Debt 14.94 22.70
EV to EBIT EV/EBIT 42.29 15.74
EV to EBITDA EV/EBITDA 27.67 11.58
EV to Free Cash Flow [EV/FCF] EV/FCF 65.95 24.79
EV to Market Cap EV to Market Cap 1.06 -2.78
EV to Revenue EV/Rev 5.77 6.45
Price to Book Value [P/B] P/B 3.38 7.12
Price to Earnings [P/E] P/E 54.65 13.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -16.40
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -7.19
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.83
Interest Coverage Int. cover (Qtr) 7.12 -13.61
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 30.83 -21.70
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -68.50 101.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.97
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -73.52 19.84
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 19.52 17.31
EBIT Growth (1y) % EBIT 1y % (Qtr) -76.51 20.90
EBT Growth (1y) % EBT 1y % (Qtr) -78.52 82.68
EPS Growth (1y) % EPS 1y % (Qtr) -75.46 65.55
FCF Growth (1y) % FCF 1y % (Qtr) -34.04 32.88
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 7.35 34.27
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.40 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.05
Cash Ratio Cash Ratio (Qtr) 0.19 2.99
Current Ratio Curr Ratio (Qtr) 1.00 4.83
Debt to Equity Ratio Debt/Equity (Qtr) 0.24 0.67
Interest Cover Ratio Int Coverage (Qtr) 7.12 -13.61
Times Interest Earned Times Interest Earned (Qtr) 7.12 -13.61
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 19.30 -296.15
EBIT Margin % EBIT Margin % (Qtr) 13.65 -316.09
EBT Margin % EBT Margin % (Qtr) 11.74 -351.37
Gross Margin % Gross Margin % (Qtr) 68.30 40.05
Net Profit Margin % Net Margin % (Qtr) 9.90 -354.10