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Trimble (TRMB) Boosts Transportation Segment With Transporeon

Trimble TRMB completed the acquisition of the cloud-based transportation management software platform provider, Transporeon.

Transporeon’s platform offers an integrated suite of sourcing, planning, execution, monitoring and settlement solutions.

Trimble used a combination of senior notes, a term loan, existing credit facilities and cash to fund the transaction.

Notably, Transporeon is now part of Trimble's Transportation segment.

With Transporeon, Trimble will be able to expand its reach to carriers, shippers and retailers, which in turn will bolster its total addressable market.

This will likely contribute well to the performance of the segment in the days ahead.

In the fourth quarter of 2022, the segment generated revenues of $150 million, which accounted for 17% of total revenues.

Trimble Inc. Price and Consensus

Trimble Inc. Price and Consensus
Trimble Inc. Price and Consensus

Trimble Inc. price-consensus-chart | Trimble Inc. Quote

Growth Prospects

The latest move of the company positions it well to capitalize on the growth prospects present in the booming transportation management system market.

Notably, this particular market is gaining from digital transformation in the transportation and logistics industries, rapid adoption of autonomous vehicles in the transportation space, and increasing rate of online shopping, which is boosting demand for quick delivery services.

A report from MarketsandMarkets states that the global transportation management system market is expected to reach $28 billion in 2027 by witnessing a CAGR of 19.1% between 2022 and 2027.

Per a report from Grand View Research, the global transportation management systems market is expected to see a CAGR of 14.8% from 2023 to 2030.

Expanding Portfolio

The Transporeon acquisition is in line with Trimble’s growing efforts toward expanding its overall product portfolio.

Apart from it, the company recently introduced Dwell Time Metric in order to enhance its Fleet Manager solution. Trimble strives to provide precise commercial location data, and aid fleets in making decisions and utilizing their assets and drivers more efficiently.

Furthermore, it strengthened its Tekla software by introducing Tekla Structures 2023, Tekla Structural Designer 2023, Tekla Tedds 2023, and Tekla PowerFab 2023.

Additionally, the company unveiled Trimble SPS986 or Trimble R780 GNSS Smart Antenna-based Siteworks Machine Guidance system to create its Siteworks software.

Moreover, Trimble improved Engage Lane, its dynamic contract procurement system, which offers dwell time indicators for smarter and more well-informed product buying decisions.

We believe all these endeavors are likely to strengthen Trimble’s footprint across various end-markets. This in turn will likely benefit the company’s overall financial performance, instilling investors’ optimism in the stock.

For 2023, Trimble expects revenues between $3.7 billion and $3.8 billion. The Zacks Consensus Estimate for the same is pegged at $3.75 billion, indicating growth of 2.1% from 2022.

Further, Trimble expects 2023 non-GAAP earnings per share within $2.66-$2.86. The Zacks Consensus Estimate for the same stands at $2.74 per share, indicating growth of 3.8% from 2022.

Notably, shares of TRMB have declined 2.8% in the year-to-date period against the Computer and Technology sector’s rise of 20.1%.

Zacks Rank and Stocks to Consider

Currently, Trimble carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Arista Networks ANET, Salesforce CRM and Analog Devices ADI. While Arista Networks and Salesforce sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks has gained 34.2% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 14.17%.

Salesforce has gained 47.3% in the year-to-date period. CRM’s long-term earnings growth rate is currently projected at 16.75%.

Analog Devices has gained 16% in the year-to-date period. The long-term earnings growth rate for ADI is currently projected at 10.5%.

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