One-glance verdict
Undervalued
$39.22 our estimate vs market $18.98
Wall Street consensus: $23.00 (-41.4% lower than our fair-value estimate)
52% below our estimate, below the bear case
Fundamentals snapshot
Titan Machinery Inc.
TITN · NMS · Industrials · Industrial Distribution
Current price
$18.98
52-week range
$13.21 - $25.00
Market cap
$442.28M
Balance sheet
Distressed
-0.06x Concerning
Net debt $828.74M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 2/10 years.
- Risk Net debt grew 115.6% over 3 years.
- Risk Return on equity was -9.1% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 6.3% to -1.0% over 3 years.
What this company does
Titan Machinery Inc.
Titan Machinery is a dealer that sells and services large farm and construction equipment, like tractors and excavators, across the United States, Europe, and Australia. The company makes money from both selling new and used machines and from the ongoing need for parts and repairs. This is a key part of their business because while equipment sales can go up and down with the economy, the income from service and parts is often more stable and predictable.
How the company got here
Titan Machinery was started in 1980 by David Meyer, who bought a couple of farm equipment stores in North Dakota. The company grew by purchasing other dealerships, first in nearby farming communities and then expanding across the U.S. A major turning point was in 2007 when the company went public, which means it started selling shares of itself on the stock market to raise money for more growth. This allowed them to expand into Eastern Europe starting in 2011 and more recently into Australia in 2023.
What it actually does
Think of Titan Machinery as a superstore for big, powerful machines used on farms and construction sites. They don't make the equipment themselves but act as a dealer, primarily for brands owned by a company called CNH Industrial, like Case IH and New Holland. Customers like farmers and construction companies buy new and used equipment from them, but that's not all. Titan also provides crucial follow-up services, like selling replacement parts, making repairs, and even renting out equipment for short-term jobs.
Agriculture
This is the company's largest and original business, making up the biggest piece of its sales. It provides farmers and ranchers with everything from massive tractors and harvesting combines to smaller equipment for home and garden use. Beyond just selling the machines, this segment is heavily focused on what's called aftermarket support (the help a customer needs after the initial purchase). This includes providing spare parts and repair services to keep farms running, which creates a steady and reliable source of income for the company.
Construction
This part of the business sells and rents heavy machinery to builders and contractors. The equipment includes things like loaders for moving dirt and machinery for building roads and developing commercial and residential sites. While smaller than the agriculture business, it provides an important source of diversification (a way to make money from different types of customers). This means if farm spending is down, the construction business can help balance things out.
Europe
Titan Machinery operates a network of dealerships in several Eastern European countries, including Romania, Bulgaria, and Ukraine. Similar to its U.S. operations, this segment sells and services agricultural equipment to local farmers and agricultural businesses. This international presence helps the company expand into different markets and not be solely dependent on the U.S. economy. The company recently decided to sell its stores in Germany to focus on other regions where it sees better opportunities.
Australia
This is Titan's newest business segment, created after acquiring a large Case IH dealership group in Australia in 2023. This move established a significant presence for the company in the grain-growing regions of southeastern Australia. The business here is very similar to its other segments, offering new and used farm equipment, parts, and service. This expansion is a key part of the company's strategy to grow in new parts of the world.
What management is betting on now
Management is focused on growing by acquiring smaller dealership groups and expanding its more profitable parts and service business. They are also concentrating their efforts on the markets where they believe they can be most successful, which is why they recently sold their German dealerships. Another key priority is carefully managing its inventory (the amount of equipment it has on hand to sell) to match what customers are buying. By focusing on these areas, the company aims to be the go-to full-service dealer in the regions it serves.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$522.38M
Net income
$-12.62M
Diluted EPS
-0.55
Operating cash flow
$-23.09M
Free cash flow
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Sources
Revenue
$641.84M
Net income
$-36.17M
Diluted EPS
-1.59
Operating cash flow
$53.57M
Free cash flow
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Sources
Revenue
$644.51M
Net income
$1.20M
Diluted EPS
0.05
Operating cash flow
$33.99M
Free cash flow
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Sources
Revenue
$546.43M
Net income
$-6.00M
Diluted EPS
-0.26
Operating cash flow
$43.70M
Free cash flow
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Sources
Revenue
$594.34M
Net income
$-13.20M
Diluted EPS
-0.58
Operating cash flow
$6.20M
Free cash flow
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Sources
Revenue
$759.92M
Net income
$-43.76M
Diluted EPS
-1.92
Operating cash flow
$126.49M
Free cash flow
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Sources
Revenue
$679.82M
Net income
$1.71M
Diluted EPS
0.07
Operating cash flow
$-8.83M
Free cash flow
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Sources
Revenue
$633.67M
Net income
$-4.30M
Diluted EPS
-0.19
Operating cash flow
$-15.01M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $39.22 vs current price $18.98
Wall Street consensus is the average analyst price target: $23.00 (-41.4% lower than our fair-value estimate).
Our most-likely fair value is $39.22 a share — about 106.6% above today's price of $18.98, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $828.7M. Interest coverage -0.1x.
Net debt
$828.74M
Interest coverage
-0.06x
Titan Machinery Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
TITN
BASELINE
Titan Machinery Inc.
Total debt $858.32M Interest coverage -0.06x This is the baseline the peer rows are being compared against.
Total debt $1.44B Interest coverage 8.17x This peer still has a real interest-payment cushion, while TITN does not.
Total debt $9.33B Interest coverage 4.88x This peer still has a real interest-payment cushion, while TITN does not.
Total debt $1.21B Interest coverage 1.45x This peer still has a real interest-payment cushion, while TITN does not.
Total debt $5.43B Interest coverage 3.59x This peer still has a real interest-payment cushion, while TITN does not.
What you should know
The case for and against TITN
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 2/10 years.
Risks
-
Net debt grew 115.6% over 3 years.
-
Return on equity was -9.1% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 6.3% to -1.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
-56.94x
P/B
0.76x
P/S
0.19x
EV/EBITDA
35.63x
PEG ratio
1.77x
Profitability
How much profit each dollar creates
Gross margin
16.2%
Operating margin
-1.0%
Net margin
-2.3%
ROE
-9.1%
ROA
-0.1%
Health
Liquidity and balance-sheet strength
Debt / equity
1.52x
Current ratio
1.38x
Quick ratio
0.18x
Total debt
$858.32M
Total cash
$29.58M
Growth
How the business has been compounding
Revenue TTM
$2.36B
Revenue 5Y CAGR
9.1%
EPS TTM
-2.35
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$108.17M
Free CF TTM
$115.09M
FCF margin
4.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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