TNC Should I Buy
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Tennant Co (TNC) is not a good buy for a beginner investor with a long-term strategy at this moment. The company is facing significant operational and financial challenges, as evidenced by weak financial performance, negative analyst sentiment, and ongoing legal investigations. Technical indicators and options data also do not suggest a strong entry point. It is better to wait for stabilization in the company's operations and financials before considering an investment.
The technical indicators for TNC are bearish. The MACD is below zero and negatively contracting, the RSI is neutral at 43.885, and moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level of 62.477, with resistance at 64.225 and support at 60.73. Overall, there is no clear bullish signal.
Hedge funds have significantly increased their buying activity, with an 8733.45% increase in the last quarter.
The company is facing operational disruptions due to an ERP transition, resulting in a $30 million sales loss, with half being unrecoverable. Financial performance in Q4 2025 was weak, with revenue, net income, EPS, and gross margin all declining significantly. Additionally, Pomerantz LLP has initiated an investigation into potential securities fraud or unlawful business practices, which adds further uncertainty.
In Q4 2025, Tennant reported a revenue drop of -11.34% YoY to $291.6 million, a net income loss of -$4.4 million (down -166.67% YoY), and an EPS of -$0.24 (down -168.57% YoY). Gross margin also declined to 34.57%, down -16.46% YoY. These figures indicate significant financial deterioration.
Freedom Capital downgraded Tennant to Hold from Buy, with a reduced price target of $67 (down from $93), citing weak Q4 results and ongoing issues such as shipment constraints, stabilization costs, and tariff inflation. The analyst expects these challenges to persist into 2026.
