On Wednesday, Oppenheimer raised its price target for shares of Trimble Navigation (NASDAQ:TRMB), a global technology company, to $88 from the previous target of $77.
The adjustment comes with a continued Outperform rating on the company's stock. Currently trading at $74.12, Trimble maintains a strong Buy consensus among analysts, with InvestingPro data showing seven analysts recently revising their earnings estimates upward.
The revision reflects a positive outlook on Trimble's ongoing shift from hardware to software revenue streams. Over the past year, the company has made strategic portfolio changes, including an Agriculture joint venture and the divestiture of its Mobility segment, which are expected to support a reevaluation of its stock. These changes have contributed to an impressive 54.27% return over the past year, with the stock now trading near its 52-week high of $76.97.
Trimble's straightforward financial goals for 2027, which include achieving $4 billion in revenue, $3 billion in Annual Recurring Revenue (ARR), and a 30% EBITDA margin, are particularly appealing to growth-oriented investors. These targets are considered attainable and provide the company with some leeway in capital allocation, allowing for a balance between growth and profit margins depending on market dynamics.
The firm also anticipates that the resolution of Trimble's filing, which is now in line with its auditors' schedule, will open the company up to a wider range of potential investors. Additionally, the expectation is that Trimble will complete the remaining $625 million in stock buybacks within the first half of 2025.
The investment firm maintains a bullish stance on Trimble, citing its attractive valuation when compared to its software industry peers and the potential for sustained growth and profitability.
With a market capitalization of $18.09 billion and a P/E ratio of 12.44, InvestingPro analysis suggests the stock is currently trading slightly above its Fair Value. For deeper insights into Trimble's valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Trimble Inc. has been the subject of several analyst upgrades following robust financial performance. Analyst firms Baird, Bernstein, and JPMorgan (NYSE:JPM) increased their price targets for Trimble to $90, $85, and $92, respectively, maintaining positive ratings. This comes after Trimble's reported 14% organic growth in Annual Recurring Revenue (ARR), reaching $2.187 billion, and a record gross margin of 68.5%.
Trimble's transition towards a software-centric business model has resulted in software and services now accounting for 75% of sales, up from 55% in 2019. This shift has significantly improved the company's financials, boosting gross margins from 58% to 70%. Moreover, Trimble's new go-to-market strategy has led to increased cross-selling, which could add an additional $1.4 billion by around 2027.
However, the company is currently under scrutiny by the Nasdaq Stock Market due to non-compliance with filing requirements. Trimble is working closely with Ernst & Young LLP to complete an assessment of its internal controls over financial reporting and plans to appeal the decision.
In a strategic move, Trimble plans to divest its mobility business to focus on high-growth sectors. The company's partnerships with Deere (NYSE:DE) and Caterpillar (NYSE:CAT) aim to enhance technology adoption. These are some of the recent developments in Trimble's operations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.