What Happened?

Shares of measurement equipment distributor Transcat (NASDAQ:TRNS) fell 13.9% in the morning session after the company reported underwhelming third-quarter earnings 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.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Transcat? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Transcat’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare 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 12.2% on the news that the company reported second-quarter earnings results. Transcat's revenue and adjusted EBITDA unfortunately missed in the quarter. However, the company expects "organic Service revenue growth in the high single-digit to low double-digit range" for the full year, slightly above expectations. Overall, this was a mixed but weaker quarter for Transcat.

Transcat is down 2.6% since the beginning of the year, and at $104.92 per share, it is trading 27.2% 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 $3,399.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefitting from the rise of AI, available to you FREE via this link.