Tennant Company Common Stock (TNC)

FairStock Score: 29/100 — RISKY

Key Financials

Strengths

• Generates $68 million in annual free cash flow (4.7% yield on market cap)

Concerns

• Trades significantly above Graham Number ($42) with negative 90% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Revenue declining at 11.3% year-over-year signals potential demand weakness or market share loss
• Weak Piotroski F-Score of 3/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Tennant Company Common Stock is a micro-cap industrials company valued at $1.5 billion. Revenue stands at $1.2 billion, though the company is currently unprofitable. From a quality standpoint, Tennant shows weak Piotroski F-Score of 3/9 signaling deteriorating fundamentals and Altman Z-Score of 2.5 in the grey zone. On valuation, the stock is trading at a premium 34.0x earnings, with trades above its Graham Number with a negative 90% margin. Growth dynamics show revenue growing at -11.3% and profit growth of -166.7%. The 1.5% dividend yield adds an income component for patient holders. Our composite FairStock Score of 29/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $68 million in annual free cash flow (4.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 34x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer