Trimble Inc

Trimble showed a decent organic revenue growth in the last quarter but failed to meet Wall Street expectations on the revenue front. The company’s top-line was impacted by the changes in the foreign exchange rates and it barely managed to meet market expectations regarding earnings. Recurring and software revenue continued to grow at quite a strong rate which is reflected by the sequential acceleration of its organic ARR growth. Higher prices of fuel inflated overall transportation costs, but the trucking margins stayed quite healthy because of the strength of the freight demand. The supply chain constraints continued to be quite dynamic in nature. The management has seen some success in up-selling and cross-selling existing and new logos with the company’s early version of the Trimble Construction one. Among key developments, Trimble has signed a pact with CLASS to develop a next-generation precision system of farming for their forage harvesters, combines, and tractors. The company launched its next-generation high-resolution GFX touchscreen displays that are targeted toward the farmers who operate mixed fleets. We provide the stock of Trimble with a ‘Hold’ rating with a revision in the target price.