Tennant’s Revenue Miss and Peer Underperformance Could Be a Game Changer for TNC

• In its most recent quarter, Tennant (NYSE:TNC) reported revenues of US$318.6 million, a 3.7% decline year on year, missing analyst expectations for both revenue and earnings per share.
• Among its water infrastructure sector peers, Tennant delivered the slowest revenue growth and weakest performance, while others either outpaced expectations or raised guidance.
• We'll examine how Tennant's earnings and revenue miss compared to peers could impact the company's future growth and market positioning.

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Tennant Investment Narrative Recap

To be a Tennant shareholder today, you need to believe in the company’s ability to weather short-term headwinds in order to benefit from long-term trends in automation, sustainability, and facility hygiene. The most recent earnings miss does not appear to materially affect these key growth catalysts, but it does make near-term revenue growth and market share the most important metrics to watch, while ongoing international sales weakness and competitive pressure remain the biggest risks to monitor.

Among Tennant’s recent announcements, its reaffirmation of full-year earnings guidance stands out in the context of disappointing Q2 results. Despite the quarterly miss, management maintained expectations for 2025, indicating confidence in the business’s fundamentals and execution on cost controls, potentially a stabilizing factor as investors weigh short-term challenges against longer-term opportunities.

In contrast, investors should be aware of Tennant’s continued vulnerability to international market slowdowns, particularly in regions like APAC and EMEA where...

Read the full narrative on Tennant (it's free!)

Tennant's outlook anticipates revenues of $1.5 billion and earnings of $138.4 million by 2028. This is based on a 5.2% annual revenue growth rate and a $77.7 million increase in earnings from the current $60.7 million.

Uncover how Tennant's forecasts yield a $109.00 fair value, a 33% upside to its current price.

Exploring Other Perspectives

Private investors in the Simply Wall St Community put Tennant’s fair value between US$109 and US$143.44, representing three different viewpoints. With recent quarterly revenue declines and industry competition intensifying, you may want to consider how these varying assumptions reflect different expectations for Tennant’s ability to maintain growth and margins.

Explore 3 other fair value estimates on Tennant - why the stock might be worth as much as 75% more than the current price!

Build Your Own Tennant Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Tennant research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Tennant research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Tennant's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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