On Wednesday, TransAct Technologies (NASDAQ:TACT) experienced a revision in its stock forecast. Craig-Hallum has lowered the share price target for the company to $9.00 from the previous $10.00, while still maintaining a Buy rating on the shares.
The adjustment comes amid recognition that TransAct's dominance in the Gaming segment, with a previous 100% market share, is expected to diminish as competitors re-enter the market. The firm also noted that original equipment manufacturers (OEMs) were previously over-purchasing printers, leading to an oversupply in the industry. This situation is anticipated to create a challenging growth profile for the fiscal year 2024.
Despite these challenges, the analyst expressed optimism about TransAct's ability to retain approximately 15%-20% of the incremental market share on a normalized basis. This retention is projected to enable the Gaming segment to resume growth after it surpasses difficult comparative figures from the past.
The revised share price target reflects the headwinds faced by the Gaming segment. However, the firm remains positive about the long-term trajectory of TransAct's business. The analyst also highlighted an eagerness to witness the company's management continue to explore strategic alternatives for the business, although these were not discussed during the company's recent call.
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