Since October 2025, Tennant has been in a holding pattern, posting a small loss of 1.5% while floating around $80.43. The stock also fell short of the S&P 500’s 5% gain during that period.
Is now the time to buy Tennant, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Do We Think Tennant Will Underperform?
We're swiping left on Tennant for now. Here are three reasons we avoid TNC and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Tennant grew its sales at a sluggish 3.8% compounded annual growth rate. This was below our standard for the industrials sector.
2. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Sadly for Tennant, its EPS declined by more than its revenue over the last two years, dropping 16.8%. This tells us the company struggled to adjust to shrinking demand.
3. New Investments Fail to Bear Fruit as ROIC Declines
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. On average, Tennant’s ROIC decreased by 3 percentage points annually each year over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.
Final Judgment
Tennant falls short of our quality standards. With its shares trailing the market in recent months, the stock trades at 16.2× forward P/E (or $80.43 per share). While this valuation is reasonable, we don’t see a big opportunity at the moment. There are superior stocks to buy right now. We’d recommend looking at a dominant Aerospace business that has perfected its M&A strategy.
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