One-glance verdict
Undervalued
$35.94 our estimate vs market $22.18
Wall Street consensus: $25.25 (-29.8% lower than our fair-value estimate)
38% below our estimate, below the bear case
Fundamentals snapshot
Titan Machinery Inc.
TITN · NMS · Industrials · Industrial Distribution
Current price
$22.18
52-week range
$13.21 - $26.90
Market cap
$521.96M
Balance sheet
Distressed
-0.06x Concerning
Net debt $866.35M. 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 -9.7% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 6.3% to -0.3% over 3 years.
What this company does
Titan Machinery Inc.
Titan Machinery is a large dealership that sells and services farm equipment, like tractors, and heavy construction vehicles across the US, Europe, and Australia. The company makes money not just from selling these big-ticket machines, but also by offering higher-margin (meaning more profitable per dollar of sales) repair services and replacement parts. This creates a reliable stream of income from customers long after the initial purchase, making the business less dependent on new equipment sales alone.
How the company got here
Titan Machinery was founded in 1980 by David Meyer, who started with a single farm equipment store in North Dakota. The company grew by buying up other local dealerships across the American Midwest, a strategy known as consolidation (combining multiple small companies into a larger one). In 2007, it became a publicly traded company, which allowed it to raise more money and expand even faster. A major turning point was its expansion into Europe in the early 2010s and, more recently, its entry into Australia in 2023.
What it actually does
Think of Titan Machinery as a car dealership, but for giant farm and construction vehicles instead of cars. The company doesn't manufacture the equipment; it sells and services machines made by big brands like Case IH and New Holland. Its main customers are farmers and construction companies who buy everything from tractors and combines to excavators. Beyond just selling new and used machines, a big part of its business is providing repair services and selling replacement parts, which creates a steady income stream. They also rent out equipment and offer related technology and financing services.
Agriculture
This is the company's largest and original business, focused on serving farmers in the United States. It sells and services essential farm equipment like tractors, combines, and sprayers that are used to grow crops. This segment makes money not just from the initial sale of a machine, but also from the ongoing need for parts and maintenance over the life of the equipment. The health of this business is closely tied to the farming economy, as farmers buy more big-ticket items when crop prices are good.
Construction
This part of the company operates in the U.S., selling and renting heavy machinery used for building roads, and commercial and residential properties. Customers are typically construction contractors who need equipment like bulldozers, excavators, and loaders. Just like the agriculture segment, this business earns recurring revenue (income that is predictable and likely to continue) from servicing the equipment and selling parts. This segment's performance often follows the cycles of the construction industry.
Europe
This segment consists of a network of dealerships located in several Eastern European countries, including Germany, Bulgaria, Romania, and Ukraine. It serves both agriculture and construction customers in that region, operating much like its U.S. counterparts. By expanding internationally, the company diversifies its business, meaning it's not solely dependent on the economic conditions of the U.S. market. This European business was built through a series of acquisitions (when one company purchases another) starting in the early 2010s.
Australia
This is Titan Machinery's newest business segment, established through a major acquisition in 2023. It operates a network of dealerships focused on selling and supporting Case IH agricultural equipment in the key farming regions of southeastern Australia. This move represents a significant expansion into a new continent, further diversifying the company's geographic footprint. The goal is to apply its successful dealership model to a new, established market.
What management is betting on now
The company is currently focused on carefully managing its inventory (the amount of new and used equipment it has on hand) to match weaker customer demand. Another key priority is growing the most stable parts of its business: parts sales and repair services. These areas are less affected by economic cycles than equipment sales and provide a reliable source of income. Management also continues to look for opportunities to acquire other dealerships, a strategy that has been central to its growth since the beginning.
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
$496.38M
Net income
$-9.15M
Diluted EPS
-0.40
Operating cash flow
$-1.97M
Free cash flow
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Sources
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
Is it cheap or expensive?
Fair value $35.94 vs current price $22.18
Wall Street consensus is the average analyst price target: $25.25 (-29.8% lower than our fair-value estimate).
Our most-likely fair value is $35.94 a share — about 62.1% above today's price of $22.18, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $866.3M. Interest coverage -0.1x.
Net debt
$866.35M
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 and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
TITN
BASELINE
Titan Machinery Inc.
Total debt $895.85M Interest coverage -0.06x This is the baseline the peer rows are being compared against.
Total debt $2.55B Interest coverage 0.90x This peer still has a real interest-payment cushion, while TITN does not.
Total debt $845.47M Interest coverage 1.41x This peer still has a real interest-payment cushion, while TITN does not.
Total debt $98.90M Interest coverage 976.00x This peer still has a real interest-payment cushion, while TITN does not.
Total debt $26.31B Interest coverage 1.89x This peer still has a real interest-payment cushion, while TITN does not.
Total debt $15.38B Interest coverage 5.55x 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 -9.7% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 6.3% to -0.3% 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
-39.08x
P/B
0.91x
P/S
0.23x
EV/EBITDA
42.00x
PEG ratio
1.77x
Profitability
How much profit each dollar creates
Gross margin
16.5%
Operating margin
-0.3%
Net margin
-2.5%
ROE
-9.7%
ROA
-0.2%
Health
Liquidity and balance-sheet strength
Debt / equity
1.61x
Current ratio
1.35x
Quick ratio
0.17x
Total debt
$895.85M
Total cash
$29.51M
Growth
How the business has been compounding
Revenue TTM
$2.31B
Revenue 5Y CAGR
9.1%
EPS TTM
-2.49
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$62.49M
Free CF TTM
$115.09M
FCF margin
5.0%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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