Financial Data and Key Metrics Changes - Total sales for Q3 2024 were $10.9 million, down 6% sequentially and down 37% compared to $17.2 million in the prior year period [23] - Gross margin for Q3 was 48.1%, down from 51.9% in the prior year period, attributed to lower overall sales volume [29] - Net loss for Q3 was $551,000 or $0.06 per diluted share, compared to net income of $906,000 or $0.09 per diluted share in the year-ago period [34] Business Line Data and Key Metrics Changes - Foodservice Technology (FST) sales were $4.3 million, up 3% sequentially and up 2% year-over-year [23] - Recurring FST revenue was $2.9 million, down 8% year-over-year but up 3% sequentially [23] - Casino and gaming revenue was $4.5 million, down 50% year-over-year due to one major OEM customer working through high inventory levels [25][26] - POS automation sales decreased 30% year-over-year to $1.1 million, attributed to difficult comparisons from the previous year [27] - TransAct Services Group (TSG) sales were down 62% year-over-year to $864,000, due to unusually high sales of legacy lottery spare parts in the prior year [28] Market Data and Key Metrics Changes - The gaming industry is experiencing a slowdown, with expectations that this trend may continue into 2025 due to macroeconomic factors [16][60] - The new business pipeline remains strong, with consistent quarter-over-quarter coverage [14] Company Strategy and Development Direction - The company is focused on improving its sales processes and nurturing leads, which has shown positive results [9][21] - A strategic review process is underway, with no specific updates available at this time [19] - The company is optimistic about the potential of its Terminal 2 product and expects continued demand from large chain customers [21] Management's Comments on Operating Environment and Future Outlook - Management revised the revenue outlook to a range of $43 million to $45 million due to unexpected demand lag in the casino and gaming sector [20] - The company is confident that the current run rate of terminal placements is sustainable and expects normalization in the gaming market by 2025 [22][62] Other Important Information - The company ended the quarter with over $11 million in cash and only $2.25 million in borrowings under its credit facility, indicating a strong liquidity position [35] Q&A Session Summary Question: Can you elaborate on the OEM in oversupply in the casino and gaming sector? - Management explained that they are working with the OEM to reconfigure existing stock for other markets to help accelerate liquidation [36][38] Question: How is the competitive environment in the gaming sector? - Management noted that while competition has returned post-pandemic, they are focused on maintaining market share and demonstrating product reliability [40][41] Question: What is the average client size and initial order attachment rate for new clients in FST? - Management indicated that they are targeting larger clients capable of purchasing a minimum of 50 to 100 units, with initial orders often being smaller as part of a land-and-expand strategy [43][46] Question: What is driving the potential for improved conversion rates in 2025? - Management highlighted that better metrics and a closer alignment between sales and marketing teams are improving lead conversion rates [55] Question: When do you expect to return to normal patterns in the gaming casino market? - Management expressed uncertainty but indicated that the market is expected to normalize in 2025 as excess inventory is worked through [60]

Core Insights - TransAct Technologies Incorporated (TACT) reported a quarterly loss of $0.06 per share, which was better than the Zacks Consensus Estimate of a loss of $0.08, representing an earnings surprise of 25% [1] - The company posted revenues of $10.87 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 8.30% and down from $17.19 million year-over-year [2] - TransAct Technologies shares have declined approximately 38.5% year-to-date, contrasting with the S&P 500's gain of 24.3% [3] Financial Performance - Over the last four quarters, TransAct Technologies has surpassed consensus EPS estimates three times [2] - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $12.8 million, and for the current fiscal year, it is -$0.26 on revenues of $46.94 million [7] Industry Context - The Computer - Peripheral Equipment industry, to which TransAct Technologies belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Performance - Net sales for Q3 2024 were $10.9 million, down 6% sequentially and down 37% compared to $17.2 million in Q3 2023[3]. - FST recurring revenue for Q3 2024 was $2.9 million, up 4% sequentially but down 8% from $3.1 million in Q3 2023[3]. - Gross profit for Q3 2024 was $5.2 million, with a gross margin of 48.1%, compared to a gross profit of $8.9 million and a margin of 51.9% in Q3 2023[4]. - Operating loss for Q3 2024 was $(837) thousand, compared to an operating loss of $(438) thousand in Q2 2024 and operating income of $1.2 million in Q3 2023[4]. - Net loss for Q3 2024 was $(551) thousand, or $(0.06) per diluted share, compared to a net income of $906 thousand, or $0.09 per diluted share in Q3 2023[5]. - EBITDA for Q3 2024 was negative $(533) thousand, compared to negative $(190) thousand in Q2 2024 and $1.5 million in Q3 2023[6]. - Net sales for the three months ended September 30, 2024, were $10,867 thousand, a decrease from $17,190 thousand in the same period of 2023, representing a decline of 36.5%[21][22]. - Gross profit for the three months ended September 30, 2024, was $5,227 thousand, down from $8,916 thousand in the prior year, reflecting a decrease of 41.5%[21]. - The company reported an operating loss of $837 thousand for the three months ended September 30, 2024, compared to an operating income of $1,191 thousand in the same period of 2023[21][24]. - Net loss for the three months ended September 30, 2024, was $551 thousand, compared to a net income of $906 thousand in the same period of 2023[21][24]. - The company’s total net sales for the nine months ended September 30, 2024, were $33,153 thousand, down from $59,366 thousand in the same period of 2023, a decrease of 44.0%[21][22]. - For the nine months ended September 30, 2023, the net income was $4,810 million, a decrease from $6,201 million in the same period last year[27]. - The operating income for the same period was reported at $6,228 million, representing 10.5% of net sales, compared to 13.0% in the previous year[27]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $(816) million, significantly lower than $9,381 million in the same period last year[28]. - The company reported an EBITDA of $(1,689) million for the nine months ended September 30, 2024, compared to $7,309 million in the previous year[28]. Expenses and Liabilities - Operating expenses for the three months ended September 30, 2024, totaled $6,064 thousand, compared to $7,725 thousand in the same period of 2023, a reduction of 21.5%[21][25]. - Total current assets decreased to $37,407 thousand as of September 30, 2024, from $40,999 thousand at the end of 2023, a decline of 6.3%[23]. - Total liabilities decreased to $12,149 thousand as of September 30, 2024, from $14,784 thousand at the end of 2023, a reduction of 17.7%[23]. - The company incurred a severance charge of $1,461 million related to the resignation of the former CEO[27]. - Operating expenses were reported at $25,801 million, accounting for 43.5% of net sales, compared to 41.0% in the previous year[27]. Cash and Shareholder Information - The company’s cash and cash equivalents were $11,343 thousand as of September 30, 2024, down from $12,321 thousand at the end of 2023[23]. - The company reported a basic net loss per common share of $0.06 for the three months ended September 30, 2024, compared to a basic net income per share of $0.09 in the same period of 2023[21][24]. - Basic and diluted net income per common share for the nine months ended September 30, 2023, was $0.48, down from $0.62 in the previous year[27]. - Income tax expense for the nine months ended September 30, 2023, was $1,189 million, compared to $1,259 million in the previous year[27]. - Interest and other expense remained consistent at $(229) million for both periods[27]. Future Outlook - The company expects full year 2024 net sales to be between $43 million and $45 million[7]. - The company anticipates full year 2024 adjusted EBITDA to be between negative $1 million and negative $2 million[7]. - The company added 12 new FST customers in Q3 2024, representing approximately 2,400 potential Terminal 2 sales opportunities[2]. - The company is actively assessing strategic alternatives with the assistance of Roth Capital Partners, LLC, while pursuing business growth initiatives[8].

Core Viewpoint - TransAct Technologies Incorporated (TACT) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, which reflects the changing earnings picture of a company [1][2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4]. Recent Performance of TransAct Technologies - TransAct Technologies is expected to earn -$0.26 per share for the fiscal year ending December 2024, representing a year-over-year change of -144.1% [8]. - Over the past three months, the Zacks Consensus Estimate for TransAct Technologies has increased by 42.2%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks generating an average annual return of +25% since 1988 [7]. - The upgrade of TransAct Technologies to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - The article emphasizes the effectiveness of value investing as a strategy that identifies undervalued stocks through fundamental analysis and traditional valuation metrics [2]. Company Summary - TransAct Technologies (TACT) is highlighted as a stock currently attracting investor attention, holding a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential in the value investing space [3]. - TACT's price-to-book (P/B) ratio is reported at 1.10, which is favorable compared to the industry average of 1.91, suggesting that TACT is undervalued relative to its peers [4]. - The stock has experienced a P/B range over the past 12 months, with a high of 1.98, a low of 0.86, and a median of 1.23, indicating volatility but also potential for value [4]. - TACT's price-to-sales (P/S) ratio stands at 0.79, which is lower than the industry average of 0.89, further supporting the notion that TACT may be undervalued [5]. - Overall, TACT is positioned as one of the market's strongest value stocks, bolstered by a positive earnings outlook [6].

Since my last article , a lot has changed at TransAct Technologies Incorporated (NASDAQ: TACT ). Specifically, the company's relationship with 7-Eleven will be ending, they've gained a significant QSR global approval, the gaming market is oversupplied, and the stock price Analyst's Disclosure: I/we have a beneficial long position in the shares of TACT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation ...

TransAct Technologies (TACT) shares have gained 15.9% in the past three months, outperforming the Zacks Computer and Technology sector, the Zacks Computer - peripheral Equipment industry and the S&P 500 index. This significant outperformance reflects TACT's continued success in expanding its product offerings, securing high-value deals and maintaining robust financial growth. With such impressive gains already on the board, the question remains — Should investors buy, sell or hold the stock now? TransAct Ex ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies. Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of ...

TransAct Technologies (TACT) shares have plunged 37.6% year to date (YTD) against the Zacks Computer and Technology Sector and S&P 500 index's growth of 18.9% and 17.1%, respectively, YTD. TACT stock has also underperformed the Zacks Computer-Peripheral Equipment industry's decline of 28.4% in the same time frame. Reason Behind TACT Stock's Underperformance TransAct Technologies is grappling with multiple challenges in its Casino and Gaming business. TACT's OEM customers have slowed their order rates as mos ...

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potent ...