We came across a bullish thesis on Tennant Company on Danny’s Substack by Danny Green. In this article, we will summarize the bulls’ thesis on TNC. Tennant Company’s share was trading at $83.31 as of February 18th. TNC’s trailing and forward P/E were 28.44 and 12.05 respectively according to Yahoo Finance.
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Tennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas and internationally. TNC represents a rare industrial investment poised at the intersection of traditional manufacturing and high-growth robotics. While doubling its current $1.3 billion revenue over five years is challenging, the company’s push into Autonomous Mobile Robots (AMRs) and expansion into new markets like industrial outdoor sweeping meaningfully expands its Total Addressable Market, supported by the global labor shortage driving demand for automation.
Near-term guidance reflects modest organic declines due to macroeconomic headwinds, but the long-term vision is transformative: TNC is evolving from a CAPEX-heavy equipment seller into a recurring revenue Equipment-as-a-Service (EaaS) platform, where high-margin subscription, data, and service fees from a connected AMR fleet could redefine the company as an industrial-tech platform over the next decade. Central to this competitive edge is TNC’s unmatched global field service network of 900+ technicians, enabling high uptime for customers and lowering adoption risk for complex robotics solutions—an advantage that pure-play digital competitors cannot easily replicate.
The company has deployed over 6,000 AMRs globally, yet must continuously invest in software and AI to maintain a technological lead amid intensifying competition. Culturally, TNC balances a 150-year heritage of discipline and dividend stability with modernization through R&D and ERP investments, though its conservative nature could slow bold, high-risk innovation.
Customers value the AMRs for labor-cost reduction, consistent performance, and sustainability benefits, while long-term returns are expected to accelerate as recurring revenue scales. With disciplined capital allocation, low leverage, and the potential to transition fully to a software-driven robotics platform, TNC could achieve a fivefold valuation if it convinces the market of its tech-like growth trajectory, unlocking exceptional upside beyond its current industrial discount.
