Twin Disc Inc (NASDAQ: TWIN)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0000100378
Market Cap 257.52 Mn
P/B 1.40
P/E 11.81
P/S 0.74
ROIC (Qtr) 188.58
Div Yield % 0.89
Rev 1y % (Qtr) 0.29
Total Debt (Qtr) 60.88 Mn
Debt/Equity (Qtr) 0.33
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About

Investment thesis

Bull case

  • Healthy cash reserves of 14.89M provide 2.31x coverage of short-term debt 6.45M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 368.94M provides 6.06x coverage of total debt 60.88M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 16.70M provides exceptional 49.84x coverage of minority interest expenses 335000, showing strong core operations.
  • Retained earnings of 146.13M provide full 2.68x coverage of long-term debt 54.44M, indicating strong internal capital position.
  • Cash position of 14.89M provides exceptional 44.44x coverage of minority interest expenses 335000, indicating strong liquidity.

Bear case

  • Operating cash flow of 16.70M barely covers its investment activities of (34.54M), with a coverage ratio of -0.48, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 14.89M against inventory of 163.18M, the 0.09 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 16.70M provides thin coverage of dividend payments of (2.29M) with a -7.31 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 14.89M provide limited coverage of acquisition spending of (17.24M), which is -0.86x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 16.70M shows concerning coverage of stock compensation expenses of 4.26M, with a 3.92 ratio indicating potential earnings quality issues.

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.79 2.28
EV to Cash from Ops. EV/CFO 18.20 37.14
EV to Debt EV to Debt 4.99 34.39
EV to EBIT EV/EBIT 57.49 27.71
EV to EBITDA EV/EBITDA 11.34 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 7,994.82 133.36
EV to Market Cap EV to Market Cap 1.18 1.04
EV to Revenue EV/Rev 0.87 39.88
Price to Book Value [P/B] P/B 1.40 6.22
Price to Earnings [P/E] P/E 11.81 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 9.54 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 10.50 15.73
Dividend per Basic Share Div per Share (Qtr) 0.16 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 5,333.33 82.53
Interest Coverage Int. cover (Qtr) 1.71 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -98.51 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -6.39 118.48
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 393.32 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 19.50 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) -65.38 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) -83.70 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) 121.74 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) -99.72 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.49 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.91 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.07 0.10
Cash Ratio Cash Ratio (Qtr) 0.13 3.01
Current Ratio Curr Ratio (Qtr) 2.13 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.33 0.38
Interest Cover Ratio Int Coverage (Qtr) 1.71 12.34
Times Interest Earned Times Interest Earned (Qtr) 1.71 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.90 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) 1.52 -7,413.30
EBT Margin % EBT Margin % (Qtr) 0.63 -9,015.79
Gross Margin % Gross Margin % (Qtr) 27.90 -32.61
Net Profit Margin % Net Margin % (Qtr) 6.30 -7,962.06