Trimble Inc. TRMB recently unveiled a Contract Maintenance module in a bid to strengthen its transportation solutions portfolio.
The latest launch is a TMT Fleet Maintenance software module, which is suitable for both monthly fixed and variable billing plans as it aids in managing maintenance service and leasing contracts.
Moreover, the module will enable fleets to save on additional administrative overhead in case of expanding service offerings. Further, the fleets will be able to streamline their monthly billing and invoicing process efficiently.
With the company’s new fleet management module, it intends to cater to the growing demand for outsourced fleet maintenance by the third-party heavy duty maintenance providers.
Fleet Management Holds Promise
Per a report from MarketsandMarkets, the global market for fleet management solutions is expected to reach $31.5 billion by 2023 at a CAGR of 14.7% between 2018 and 2023.
Further, a report from Mordor Intelligence suggests that the market is expected to witness a CAGR of 20.07% over a period of 2019-2024.
Trimble is well poised to cater to this booming market with its Contract Maintenance module, which is an amalgamation of maintenance tools – repair orders, staff management, inventory tracking, preventative maintenance and contract management tools.
The company is likely to gain momentum across fleets, outsourced maintenance providers and leasing companies. This in turn will strengthen Trimble’s position in the global fleet management market.
Trimble Inc. Revenue (TTM)
Trimble Inc. revenue-ttm | Trimble Inc. Quote
Expanding Transportation Portfolio
The latest move is testament to Trimble’s continued focus toward expansion of its transportation solutions portfolio.
Apart from Contract Maintenance, the company’s buyout of a fleet management provider, Veltec, helped in strengthening fleet safety and efficiency solutions portfolio.
Further, the company recently rolled out TMW.Suite and TruckMate transportation management system (TMS) solutions, which provide advanced transportation operations management to the transportation and logistics providers.
We believe expanding transportation offerings will deliver better customer experience, which in turn will strengthen customer base. Notably, it won a client, Merchants Distributors, which will leverage Trimble SmartDelivery solution in order to provide cost-effective delivery services.
Notably, expanding portfolio and customer base are anticipated to accelerate sales growth in the company’s Transportation segment, which generated $198.8 million sales in the last reported quarter. The figure was up 9.3% year over year and accounted for 23.3% of the total revenues.
However, higher support spending related to Trimble’s customer migration to ELD software is hurting the margins of this particular segment. Moreover, the company expects customer support cost to increase in the upcoming quarter, which remains a headwind.
Zacks Rank & Stocks to Consider
Currently, Trimble carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Garmin GRMN, Koninklijke Philips PHG and KLA-Tencor KLAC. While Garmin sports a Zacks Rank #1 (Strong Buy), Koninklijke Philips and KLA-Tencor carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected earnings growth rate for Garmin, Koninklijke Philips and KLA-Tencor is currently pegged at 7.35%, 15.5% and 13.28%, respectively.
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