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1. Company Snapshot

1.a. Company Description

Team, Inc., together with its subsidiaries, provides asset performance assurance and optimization solutions in the United States, Canada, Europe, and internationally.It operates through Inspection and Heat Treating (IHT), Mechanical Services (MS), and Quest Integrity segments.The IHT segment offers non-destructive evaluation and testing, radiographic testing, ultrasonic testing, magnetic particle inspection, liquid penetrant inspection, positive material identification, electromagnetic testing, alternating current field measurement, and eddy current testing services.


This segment also provides long-range guided ultrasonic testing, phased array ultrasonic testing, terminals and storage inspection and management program, rope access, mechanical and pipeline integrity, heat treating, and robotics and inspection services.The MS segment offers engineered composite repair, emissions control/compliance, hot tapping, valve insertion, field machining, bolted joint integrity, vapor barrier plug and weld testing, and valve management services, as well as leak repair services for pipes, valves, and flanges, as well as other parts of piping systems, pipelines, and related assets.The Quest Integrity segment provides furnace tube inspection system-enabled, in-line inspection, pipeline integrity management, engineering and condition assessment, and robotics and inspection services.


It also offers onstream services comprising of line stopping and on-line valve insertion solutions.The company serves refining, power, renewables, nuclear, liquefied natural gas, chemical, petrochemical, pulp and paper, automotive, mining, valves, terminals and storage, pipeline, offshore oil and gas, and aerospace and defense industries, as well as amusement parks, bridges, ports, construction and buildings, roads, dams, and railways.Team, Inc.


was founded in 1973 and is headquartered in Sugar Land, Texas.

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1.b. Last Insights on TISI

Team, Inc.'s recent performance was negatively impacted by a year-over-year decline in Q3 earnings, despite strong revenue gains. The company's transformation plan shows progress, with rising revenues, stronger margins, and improving segment performance. However, the earnings decline overshadowed these positives. Additionally, Team Internet Group PLC's strategic review to unlock the full value of its portfolio may create uncertainty. The company's $75 million private placement of preferred stock in September aimed to reduce leverage and enhance financial flexibility.

1.c. Company Highlights

2. Disappointing Earnings Miss, But Operational Progress

Team, Inc.'s third-quarter results showed revenue growth of 7% or $14 million year-over-year, driven by a 5.7% increase in the inspection and heat treating segment and a 7.8% rise in Mechanical Services. However, the actual EPS of -$5.46 significantly missed estimates of $0.2. Adjusted EBITDA margin improved by 110 basis points to 6.5% of consolidated revenue, with adjusted EBITDA increasing by $3.2 million year-over-year. The company's cost discipline efforts yielded benefits, with adjusted selling, general, and administrative expenses decreasing to 20.8% of consolidated revenue from 21.7% in 2024.

Publication Date: Nov -20

📋 Highlights

Operational Highlights

The inspection and heat treating segment saw strong nested and call-out activity in the U.S., driving 5.7% overall revenue growth, while international operations, including Canada, grew by 8.9%. Mechanical Services experienced a 7.8% revenue increase, led by heightened turnaround demand in U.S. operations and improved top-line performance in Canada. As Keith D. Tucker, CEO, noted, the company's diversified portfolio positions it to navigate macroeconomic uncertainty, and they expect top-line growth across both segments in 2025.

Valuation and Outlook

With a P/E Ratio of -1.34 and an EV/EBITDA of 9.27, the market has already priced in significant challenges. The company's guidance for 5% revenue growth and 13% adjusted EBITDA growth in 2025 suggests operational improvements are underway. However, analysts estimate a -2.0% revenue growth for the next year, indicating potential headwinds. The Net Debt / EBITDA ratio of 7.67 raises concerns about the company's leverage, despite the $75 million investment from Stellix Capital Management, which strengthened the balance sheet.

Future Prospects

The company's focus on cost and capital discipline, along with execution on commercial initiatives, is expected to drive profitable growth. While the current valuation metrics indicate a challenging environment, the ROE of 1388.02% and ROIC of 2.63% suggest some positive underlying trends. Nevertheless, the significant EPS miss and potential revenue decline in the next year warrant caution.

3. NewsRoom

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Capital Bank Accelerates SBA Growth with a Strategic Expansion of its SBA Team

Dec -04

Source: globenewswire.com

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Nixxy, Inc. Strengthens Leadership Team with Appointment of Julia Yu as Chief Financial Officer

Dec -04

Source: accessnewswire.com

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High Roller Strengthens Leadership Team, Appointing Carlo Scappaticci as Chief Marketing Officer and Frances Cong as Director of Marketing

Dec -04

Source: globenewswire.com

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World Series of Poker® Mobile Game Announces Integration to Feature NFL Collectibles, Team Challenges and Exclusive Rewards for a Limited Time

Dec -04

Source: prnewswire.com

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BINAH Capital Group Welcomes Recently Acquired Commonwealth Team to its Broker-Dealer Platform Through its Long-Standing Strategic Relationship with Merit Financial Advisors

Dec -03

Source: globenewswire.com

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The Bank of Glen Burnie Names Todd Capitani to its Leadership Team as Chief Financial Officer

Dec -03

Source: globenewswire.com

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Maple Leaf Foods Joins Team Canada as Official Protein Partner

Dec -03

Source: prnewswire.com

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BODi and Reebok Fitness Team Up to Expand Access to BODi's Iconic Fitness, Nutrition and Wellness Solutions Through the Reebok Fitness App

Dec -03

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Mechanical Services

Expected Growth: 4.5%

Growing demand for mechanical integrity and reliability services in industrial facilities, driven by increasing focus on safety, efficiency, and environmental sustainability, is expected to drive the growth of Mechanical Services from Team, Inc.

Inspection and Heat Treating

Expected Growth: 4.5%

Growing demand for non-destructive testing and heat treatment services in industries such as aerospace, oil and gas, and power generation, driven by increasing focus on safety, quality, and reliability, is expected to drive the growth of the inspection and heat treating segment.

7. Detailed Products

Team Industrial Services

Provides industrial services including maintenance, repair, and operations (MRO) support, turnaround and outage services, and fabrication and construction services

Team Engineering Services

Offers engineering services including design, engineering, procurement, and construction management (EPCM) services, and front-end engineering design (FEED) services

Team Quest Integrity

Provides integrity management services including inspection, testing, and certification services for pipelines, tanks, and other infrastructure

TeamFurmanite

Offers on-site machining, welding, and fabrication services for the repair and maintenance of equipment and machinery

Team Heat Treating

Provides heat treating services including stress relieving, annealing, and hardening for metals and alloys

8. Team, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Team, Inc. is medium due to the availability of alternative collaboration tools and platforms.

Bargaining Power Of Customers

The bargaining power of customers is high due to the ease of switching to alternative collaboration tools and platforms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers and the ease of switching.

Threat Of New Entrants

The threat of new entrants is medium due to the ease of entry into the collaboration tools and platforms market.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple established players in the collaboration tools and platforms market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 87.56%
Debt Cost 12.82%
Equity Weight 12.44%
Equity Cost 12.82%
WACC 12.82%
Leverage 703.67%

11. Quality Control: Team, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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LegalZoom

A-Score: 4.7/10

Value: 2.4

Growth: 6.6

Quality: 7.2

Yield: 0.0

Momentum: 9.0

Volatility: 3.0

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Kodak

A-Score: 4.5/10

Value: 7.2

Growth: 4.7

Quality: 3.8

Yield: 0.0

Momentum: 9.0

Volatility: 2.3

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Team

A-Score: 3.8/10

Value: 10.0

Growth: 3.0

Quality: 6.1

Yield: 0.0

Momentum: 2.0

Volatility: 1.7

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DLH

A-Score: 3.8/10

Value: 8.0

Growth: 5.8

Quality: 3.9

Yield: 0.0

Momentum: 1.0

Volatility: 4.0

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Performant Financial

A-Score: 3.4/10

Value: 4.6

Growth: 3.9

Quality: 4.5

Yield: 0.0

Momentum: 2.5

Volatility: 4.7

1-Year Total Return ->

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Wilhelmina

A-Score: 3.3/10

Value: 6.7

Growth: 2.4

Quality: 6.5

Yield: 0.0

Momentum: 1.5

Volatility: 3.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.6$

Current Price

14.6$

Potential

-0.00%

Expected Cash-Flows