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what it is
Tennant makes the machines, parts, and coatings used to clean warehouses, stores, factories, roads, and parking lots.
how it gets paid
Last year Tennant made $1.2B in revenue. floor scrubbers was the main engine at $456M, or 38% of sales.
why growth slowed
Revenue fell 6.5% last year. Sales declined 5.4% in the third quarter, owing to volume weakness across most regions and a difficult prior-year backlog comparison.
what just happened
Tennant missed on EPS, reporting $1.39 versus the $1.68 estimate.
At a glance
A balance sheet — strong enough to weather a downturn
75/100 earnings predictability — reasonably predictable
13.1x trailing p/e — the market's not buying it — or you found a deal
1.6% dividend yield — cash in your pocket every quarter
13.0% return on capital — nothing to write home about
xvary composite: 66/100 — average
What they do
Tennant makes the machines, parts, and coatings used to clean warehouses, stores, factories, roads, and parking lots.
When your cleaning fleet breaks, downtime costs money fast. Tennant gets 40% of sales outside the U.S. and keeps customers tied in through parts, service, and replacement machines from the same vendor. Switching costs (changing suppliers) → retraining crews and stocking new parts → your savings can vanish.
How they make money
$1.2B
annual revenue · their business grew -6.5% last year
floor scrubbers
$456M
8.7%
floor sweepers
$228M
8.7%
specialized cleaning equipment
$156M
8.7%
parts, service, and consumables
$300M
+2.5%
industrial floor coatings
$60M
+1.0%
The products that matter
sells cleaning equipment
Equipment sales
$0.7B · 58% of revenue
It's the largest piece of the business at roughly $0.7B, and it fell 8.7%. When this segment slows, the whole company feels heavier.
58% of revenue
replaces worn parts
Parts & consumables
$0.3B · 25% of revenue
This roughly $0.3B segment was flat. That's less exciting than growth, but steadier than new equipment demand.
25% of revenue
maintains installed machines
Service
$0.2B · 17% of revenue
Service is about $0.2B of revenue and was up while equipment fell. That's the stabilizer investors want to see keep growing.
17% of revenue
Key numbers
13.1x
trailing p/e
You are paying 13.1 times trailing earnings for a company with an A balance sheet grade and an 18-month target of $87.
$1.2B
annual revenue
This is a real industrial business with scale, but sales still fell 6.5%, so the recovery case matters more than the story.
5.7%
operating margin
Operating margin → profit left after running the business → so what: there is not much room for sloppy execution.
13.0%
return on capital
Return on capital → profit earned on invested money → so what: Tennant is still a decent operator even during a sales slump.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 75 / 100
- long-term debt $238M (15% of capital)
- net profit margin 10.3% — keeps 10 cents of every dollar in revenue
- return on equity 15% — $0.15 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in TNC 3 years ago → it's now worth $13,080.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Tennant missed on EPS, reporting $1.39 versus the $1.68 estimate.
The miss came as volume stayed weak across most regions, especially North America. Management also said equipment sales fell 8.7%, with only partial help from services and parts growth.
$912M
revenue
$2.57
eps
42.1%
gross margin
the number that mattered
The key number was the 17.26% EPS miss, because it tells you weak demand is showing up in actual results, not just cautious commentary.
-
tennant’s stock price has pulled back since our october review.despite decent earnings results in the september period, investors are likely concerned that sales remain under pressure. sentiment has softened over the past three months primarily because revenue and earnings trends have come up short relative to expectations, even as margins improved.
-
sales declined 5.4% in the third quarter, owing to volume weakness across most regions (especially in the north american industrial segment) and a difficult prior-year backlog comparison.
-
relatedly, equipment sales were down (8.7%), offset only partially by growth in services and parts/consumables.thus, although we believe the fourth quarter showed signs of improvement, uneven fundamentals remain a challenge.
-
we look for a solid operational recovery in 2026.the easing of comparison pressure should be meaningful, especially with the evening out of industrial demand. the lapping of 2025’s tariffdriven hesitation and backlog distortions should allow north american industrial volumes to recover as deferred capital spending resumes. margin performance is expected to benefit from a full-year impact of pricing actions, cost reductions, and improved mix as higher-value equipment and amr adoption scales. new product momentum, including the z50 citadel and expanding amr portfolio, supports growth across global end markets. completion of the erp efficiency program deployment in the emea region will enhance operating efficiency, data visibility, and margin discipline, while strengthening cash flow and capital deployment flexibility.
-
the attractive long-term story remains intact.operational growth is likely to be driven by the expansion of autonomous mobile robotics, product innovation, and the penetration of large global strategic accounts.
source: company earnings report, 2026
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What could go wrong
The #1 risk is ERP rollout friction colliding with weak equipment demand.
high
ERP execution risk
Management has already said the software rollout hurt 2025 results. When a $1.2B business trips over its own systems, the hit shows up everywhere from margins to inventory to customer service.
You already saw the pain in a quarter where EPS fell to $0.80, down 27% from a year ago.
med
Capital spending slowdown
Equipment sales are 58% of revenue, so customer caution matters more here than at a pure service business. Warehouses and factories can delay a new machine longer than they can delay a repair.
A 10% hit to the roughly $0.7B equipment segment would pressure annual revenue by about $70M.
med
Recovery expectations get ahead of results
The stock trades at 13.1x trailing earnings because investors expect 2026 to look better than 2025. If the rebound slips again, the multiple stops looking cheap and starts looking fair.
The current FY2026 revenue estimate is $1B, still below the current $1.2B revenue base. That leaves little room for another miss.
low
Shareholder pressure
Gabelli Funds disclosed a 5% stake. That does not change the business overnight, but it does raise the odds of louder demands if execution stays uneven.
The direct financial impact is unquantified. The real effect would be strategic pressure on management if results do not improve.
58% of revenue still comes from equipment sales, so this stock needs both cleaner execution and healthier demand. One without the other is not enough.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
ERP cleanup
If system issues keep bleeding into operations, the recovery case gets pushed back again.
metric
equipment sales mix
This segment is 58% of revenue. You want to see it stop shrinking faster than parts and service can offset.
earnings
next proof point
Last quarter EPS was $0.80. The next report needs more than hopeful commentary — it needs cleaner numbers.
trend
service + parts resilience
Together they are 42% of revenue. If that base keeps holding, Tennant has time to wait for equipment demand to recover.
Analyst rankings
short-term outlook
average
Outlook rank 3. In human-speak: analysts do not see a strong edge here over the next year.
risk profile
average
Risk rank 3. This is not a bunker stock, but it is not a roulette wheel either.
chart momentum
average
Momentum rank 3. The chart is waiting for fundamentals to pick a direction.
earnings predictability
75 / 100
Usually a fairly dependable business. The recent misses are what make this setup interesting — and riskier.
source: institutional data
Institutional activity
115 buyers vs. 110 sellers in 3q2025. total institutional holdings: 17.7M shares.
source: institutional data
Price targets
3-5 year target range
$61
$112
$75
current price
$87
target midpoint · +16% from current · 3-5yr high: $195 (+160% · 28% ann'l return)
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