Taking Stock of Trimble (TRMB): Is Its Recent Rerating Backed by Fundamentals?

Trimble (TRMB) has quietly outperformed the broader tech space this year, and its latest move higher has investors asking whether the stock’s rerating is justified by fundamentals or getting slightly ahead of itself.

See our latest analysis for Trimble.

The latest leg up to a share price of $79.91 builds on a solid year to date, with a 14.63 percent year to date share price return and a strong 3 year total shareholder return of 63.99 percent. This suggests momentum is still broadly constructive, even if the recent 7 day share price pullback hints at some profit taking.

If Trimble’s run has you thinking more broadly about where tech capital might flow next, it could be worth exploring high growth tech and AI stocks as potential next wave beneficiaries.

With shares still trading at a discount to analyst targets and solid earnings momentum, is Trimble quietly offering mispriced upside potential, or is the market already baking in the bulk of its future growth?

Most Popular Narrative Narrative: 18.8% Undervalued

With Trimble’s last close at $79.91 versus a narrative fair value near $98, the current share price implies investors are not fully paying up for its targeted margin and recurring revenue ambitions.

Long term targets of $3B in annualized recurring revenue, $4B in sales and a 30 percent EBITDA margin by 2027 are viewed as achievable or beatable. This reinforces confidence in execution and potential upside to current consensus estimates.

Read the complete narrative.

Curious how recurring revenue, rising margins and a richer earnings multiple come together to justify that upside gap. Want to see the detailed roadmap behind that valuation call.

Result: Fair Value of $98.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent construction softness or slower than expected hardware to software migration could delay recurring revenue growth and quickly challenge the current upside thesis.

Find out about the key risks to this Trimble narrative.

Another Angle on Valuation

There is a catch. While narrative and DCF style work suggest upside, Trimble trades on a rich 53.2 times earnings versus a fair ratio of 32.3 times, the US Electronic industry at 24.1 times and peers at 36.8 times. That premium multiple raises the risk of a sharp de rating if growth disappoints, or margins stall.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Trimble Narrative

If this perspective does not quite align with your own, or you would rather dig into the numbers yourself, you can build a personalized Trimble storyline in just a few minutes, Do it your way.

A great starting point for your Trimble research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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