Titan Machinery Shares Gain On Solid Q2, Raised FY23 Forecast

Titan Machinery Inc. TITN reported second-quarter FY23 revenue growth of 31.5% year-on-year to $496.54 million, beating the consensus of $439.77 million.
Equipment sales increased by 37.6% Y/Y, and Parts sales rose by 18.9%.
EPS improved to $1.10 from $0.50 in 2Q22, beating the consensus of $0.70.
The gross profit margin expanded 82 bps to 20.7% for the quarter. The operating margin expanded by 247 bps to 6.8%.
Adjusted EBITDA increased to $40.23 million (+71.1% Y/Y), and the margin expanded by 187 bps to 8.1%.
TITN cash used in operating activities year-to-date totaled $(20.95) million versus cash generated of $28.56 million a year ago.
Cash at Q2-end was $142.06 million. Inventories increased to $556.4 million as of July 31, 2022, compared to $421.8 million as of January 31, 2022.
"We are in a great position to sustain our sales growth and as a result, we are increasing our modeling assumptions for both revenue and earnings per share for the second half of fiscal 2023," stated David Meyer, Titan Machinery's Chairman and CEO.
"We expect that equipment availability will remain constrained due to ongoing supply chain challenges of our suppliers, together with new cash crop equipment allocations and shorter pricing windows for fiscal 2024," he added.
FY23 Outlook: The company expects EPS of $3.70-$4.00 (prior expectation of $2.90 - $3.20) against the consensus of $3.18.
Price Action: TITN shares are trading higher by 8.72% at $33.65 on the last check Thursday.

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