Trimble’s (TRMB) stock has returned 6.2% year-to-date (YTD), a respectable performance considering the broader Zacks Internet – Software industry’s rise of 12.3% and the Zacks Computer & Technology sector’s return of 19.9%. While TRMB may not be leading the pack, its recent performance has been driven by strong results in its buildings, infrastructure, and transportation segments.
The company’s impressive growth in Annual Recurring Revenue (ARR) is a significant positive factor. In the second quarter of 2024, recurring software services represented 75% of total revenues, highlighting a growing reliance on recurring revenue streams. This trend is expected to continue, contributing to TRMB’s top-line growth in 2024.
Trimble’s strategic partnership with Platform Science, aimed at driving innovation in the global transportation sector, is another noteworthy development. This deal involves Platform Science acquiring Trimble’s global transportation telematics business units, while Trimble becomes a shareholder in Platform Science’s expanded business. This collaboration promises to integrate advanced commercial vehicle ecosystems, enhancing driver experience, fleet safety, and efficiency.
The company’s new Reality Capture platform, an extension of Trimble Connect, offers a secure, intuitive web-based solution for handling point clouds and 360-degree imagery. This platform fosters collaboration on complex projects across various sectors, including construction, surveying, infrastructure, utilities, energy, and mining. Trimble Unity, the company’s new asset lifecycle management software suite, empowers owners of capital projects and public infrastructure to streamline asset planning, design, construction, operation, and maintenance through centralized data and connected digital workflows.
Despite its promising initiatives, Trimble’s near-term prospects aren’t without challenges. Weakness in the North American transportation mobility business and adverse foreign exchange rates cast a shadow on the company’s outlook. Additionally, TRMB’s stock is not considered cheap, with a Value Style Score of D suggesting a stretched valuation. Currently, Trimble holds a Zacks Rank #3 (Hold), indicating a neutral outlook.
While Trimble’s continuous efforts to expand its client base and robust portfolio are expected to drive top-line growth, investors should carefully consider these factors before making an investment decision.
