This Industrial Stock Could Be Worth $25 Billion

2026-01-03 07:35:00 ET

When does a hardware company become a software company? It's a good question, particularly in the case of Trimble (NASDAQ: TRMB) , a company specializing in positioning and workflow technology. The stock is priced at a discount to its software peers due to its legacy hardware business, despite its software, services, and recurring revenue now accounting for almost 80% of its revenue. Here's why Trimble is undervalued by as much as 30%.

Instead of trading at a discount, Trimble should arguably trade at a premium to its peers. This would reflect the margin expansion and increased free cash flow ( FCF ) generation opportunities from the ongoing shift to recurring revenue from software subscriptions and services. I'll address the valuation argument momentarily, but first, a few words on the growth opportunities ahead.

To be clear, Trimble's hardware will always be a part of its business. The company's roots lie in hardware products that provide customers with precise positioning, notably in the construction , infrastructure , geospatial, mapping, and transportation sectors.

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