TRMB: Automation End Markets And Buybacks Will Support Future Upside

Analysts have modestly reduced their Trimble price target, with the new estimate at about $93 compared with the prior fair value view near $98. This change reflects updated expectations for growth, profitability and a lower future P/E multiple.

Analyst Commentary

Recent Street research paints a mixed picture for Trimble, with one major firm cutting its target while another edges its target higher as part of a broader industrial technology review. For you as an investor, the key debate centers on how much upside is left in the shares relative to execution on growth initiatives and profitability.

Bullish Takeaways

Bullish analysts see enough earnings power and cash flow potential to support a triple digit price target. This suggests they view the current valuation as reasonable for a company tied to long term themes such as data centers, factory and warehouse automation, electronics, test and measurement, and semiconductors.
The inclusion of Trimble in a positive 2026 industrial technology and distribution outlook signals confidence that the company can participate in demand tied to automation and digital infrastructure build outs.
An Overweight stance from bullish analysts points to expectations that Trimble can execute well enough on its growth and margin plans to outperform a broader peer group over time.
Exposure to several end markets rather than a single demand driver gives Trimble multiple ways to support revenue and earnings. Some analysts view this as helpful for justifying higher valuation multiples.

Bearish Takeaways

JPMorgan cutting its price target by US$10 highlights concerns that prior expectations for growth, profitability and the future P/E multiple may have been too optimistic.
Bearish analysts appear more cautious on how much investors should pay for Trimble, implying that the risk reward profile may be less attractive if execution on growth initiatives or margin improvement is slower than hoped.
The lower target underscores sensitivity to changes in assumptions around long term earnings trajectories, reminding investors that valuation can reset quickly when estimates are revisited.
With one major firm trimming its view while others stay constructive, there is less consensus on upside potential from here. This can contribute to higher share price volatility as new information comes in.

What's in the News

Trimble authorized a new share repurchase program of up to US$1,000 million with no set expiration date, following Board approval on December 3, 2025 (Key Developments).
Under the prior buyback announced on February 19, 2025, Trimble completed repurchases of 12,188,949 shares, representing 5% of shares, for US$875.44 million, including 1,900,000 shares bought between October 4, 2025 and December 3, 2025 for US$148.1 million (Key Developments).
For the first quarter of 2026, Trimble guided to revenue of US$893 million to US$918 million and GAAP EPS of US$0.32 to US$0.36, and for full year 2026 it guided to revenue of US$3.81b to US$3.91b and GAAP EPS of US$2.04 to US$2.23 (Key Developments).
Management reiterated a focus on M&A, particularly tuck in deals in construction software, and highlighted that future cash use in 2026 is expected to be primarily a mix of repurchases and M&A after reinvestment in the business (Key Developments).
Trimble was dropped from the S&P Technology Hardware Select Industry Index and added to the S&P Software & Services Select Industry Index, reflecting its classification within software and services (Key Developments).

Valuation Changes

Fair Value: Trimble's estimated fair value has fallen modestly, moving from about $98.08 to about $93.33.
Discount Rate: The discount rate has risen slightly, from 8.63% to about 8.64%. This signals a very small change in the required return used in the model.
Revenue Growth: Assumed long term revenue growth has risen from about 6.45% to about 7.73%. This indicates higher modeled top line expansion.
Net Profit Margin: The modeled net profit margin has increased from about 16.18% to about 18.53%. This reflects higher expected profitability in the forecast period.
Future P/E: The assumed future P/E multiple has fallen meaningfully, from about 42.1x to about 33.6x. This change offsets some of the higher growth and margin assumptions in the updated valuation.

Expanding cloud-based, AI-driven software and shifting to subscription models boost recurring revenues, margin performance, and long-term earnings predictability.
Infrastructure growth, targeted acquisitions, and better SMB and enterprise penetration drive sustained demand and accelerate revenue and margin expansion.
Persistent government spending weakness, technological disruption, and intensifying competition threaten Trimble's growth, profitability, and ability to execute a smooth transition to recurring revenue.

Catalysts

About Trimble

Provides technology solutions that enable professionals and field mobile workers to enhance or transform their work processes in North America, Europe, the Asia Pacific, and internationally.What are the underlying business or industry changes driving this perspective?

Accelerating adoption of AI-enabled, cloud-based solutions (such as ProjectSight, autonomous procurement, and analytics in project management and transportation) is increasing customer value and workflow integration, supporting higher recurring software revenues and improved net margins.
The migration from hardware-focused, CapEx models to bundled, subscription-based offerings-even in traditionally hardware-oriented segments-expands the addressable market, improves revenue visibility, and increases recurring revenue mix, driving greater predictability and enhanced long-term earnings.
Strong momentum in infrastructure modernization and global construction activity, supported by robust state-level transportation budgets and public works projects, is creating sustained demand for Trimble's core offerings, which underpins top-line revenue growth over the coming years.
Deeper market penetration in the underpenetrated SMB segment and increased cross-sell/up-sell activity within existing mid-market and enterprise customers, facilitated by improved go-to-market strategies and digital marketing, will further accelerate ARR growth and support margin expansion.
Ongoing targeted acquisitions and rapid integration of niche technology (such as Trimble Materials), combined with internal operational efficiency improvements (from AI and organizational transformation), are expected to drive both margin expansion and incremental revenue growth.

Trimble Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Trimble's revenue will grow by 4.3% annually over the next 3 years.
Analysts assume that profit margins will increase from 8.0% today to 19.2% in 3 years time.
Analysts expect earnings to reach $776.4 million (and earnings per share of $3.5) by about September 2028, up from $286.7 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.4x on those 2028 earnings, down from 66.5x today. This future PE is greater than the current PE for the US Electronic industry at 23.9x.
Analysts expect the number of shares outstanding to decline by 3.18% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.37%, as per the Simply Wall St company report.

Trimble Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Prolonged softness in U.S. federal government and civilian spending-especially given the year-over-year decline and slow multiyear appropriations in federal contracts-could create a structural headwind and constrain future revenue growth in Field Systems and overall company performance.
Accelerating adoption of AI and cloud-based solutions by competitors and the need for sustained, high R&D investment pose a risk of technological obsolescence, potentially impacting Trimble's ability to maintain differentiated product offerings and, in turn, limiting future net margin expansion.
While the transition to subscription-based recurring revenue models is showing progress, management acknowledges hardware adoption will be a "much slower adoption" than software; any stagnation or resistance here could mute long-term ARR and earnings growth despite high expectations.
Macroeconomic uncertainties, such as lingering tariff and FX risks, labor inflation, and materials cost pressures, are cited as a rationale for conservative guidance and could result in revenue and net income volatility if these factors persist or worsen.
Market consolidation and increased price-based competition, especially from low-cost providers in GNSS hardware and sensors, threaten to erode Trimble's pricing power and gross margins over time, with potential knock-on effects to both revenue and profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $94.75 for Trimble based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $100.0, and the most bearish reporting a price target of just $84.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.1 billion, earnings will come to $776.4 million, and it would be trading on a PE ratio of 33.4x, assuming you use a discount rate of 8.4%.
Given the current share price of $80.06, the analyst price target of $94.75 is 15.5% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

TRMB: Software Shift Will Drive Stronger Recurring Revenue Growth Ahead