Team Stock Jumps 20% After Q4 Earnings Rise and Margin Gains

Shares of Team, Inc. TISI have gained 20.1% since reporting fourth-quarter and 2024 results, outperforming the S&P 500 index’s decline of 0.1%. Over the past month, TISI shares have risen 4%, bucking broader market weakness that saw the S&P 500 fall 4.8%.Revenue & Earnings Show ImprovementsFor the fourth quarter of 2024, Team reported revenues of $213.3 million compared with $214.1 million in the prior-year period. Despite the marginal decline, the company posted significant profitability improvements. The gross margin rose to $57.3 million, or 26.9% of revenues, representing a 330-basis-point expansion and a $6.9-million increase from the prior year. Operating income was $2.2 million against an $8.9-million loss in the fourth quarter of 2023.Net loss narrowed substantially to $7.2 million, or $1.61 per share, from $23.1 million, or $5.25 per share, in the prior-year quarter. Consolidated adjusted EBITDA increased 50.5% year over year to $14.6 million, accounting for 6.9% of revenues versus $9.7 million, or 4.5% of revenues, a year ago.For the year, TISI generated revenues of $852.3 million, down from $862.6 million in 2023. However, the gross margin improved to $223.2 million (26.2% of revenues) from $211.2 million (24.5% of revenues). Operating income for 2024 was $10.1 million against a $13.3 million operating loss in the prior year. Net loss narrowed to $38.3 million from $75.7 million in 2023. Adjusted EBITDA grew 27.7% to $54.3 million, or 6.4% of revenues.Team, Inc. Price, Consensus and EPS Surprise  Team, Inc. price-consensus-eps-surprise-chart | Team, Inc. QuoteOperational Efficiency Drives Margin ExpansionTeam’s earnings improvements were largely driven by its focus on operational efficiency. Selling, general and administrative (SG&A) expenses declined $4.2 million year over year in the fourth quarter to $55.1 million and fell by $11.4 million, or 5.1%, over the full year. Adjusted SG&A expenses for 2024 totaled $182.7 million, slightly down from $183.6 million in 2023.Both of the company’s core segments — Inspection and Heat Treating (IHT), and Mechanical Services (MS) — contributed to higher operating income in the fourth quarter. IHT’s operating income rose 45.4% year over year to $9.5 million, whereas MS grew 51% to $8.1 million. For the year, IHT’s operating income increased 52.8% to $37 million, whereas MS held steady at $27.3 million. Corporate and shared service costs declined 25.8% in the quarter and 17% for the year due to reduced legal and professional fees.Management Commentary Reflects Confidence in Road MapCEO Keith Tucker emphasized that the results validate Team’s operational and commercial initiatives.“We expanded our Adjusted EBITDA margin by 150 basis points to 6.4% in 2024, generating a 27.7% year-over-year improvement in Adjusted EBITDA,” said Tucker.CFO Nelson Haight stated that the company delivered year-over-year improvement in quarterly adjusted EBITDA for eight consecutive quarters, underscoring the consistency of execution.Key Factors Behind Performance GainsTISI attributed its margin gains to improved pricing, a more favorable project mix and lower operating costs. In particular, higher-margin call-out work and turnaround activities contributed to strong performance in the United States, which offset revenue declines in Canada and other international regions. Operating income was also aided by the completion of cost optimization programs throughout 2024.Free cash flow for the fourth quarter reached $19.6 million from $8.1 million a year earlier. For the year, free cash flow totaled $13.3 million, a turnaround from a negative $21.4 million in 2023.Guidance & OutlookManagement projects mid-single-digit top-line growth for 2025, driven by expanding higher-margin service offerings and market penetration into adjacent sectors such as midstream, aerospace and industrial lab testing. The company expects at least 15% year-over-year growth in adjusted EBITDA and targets a long-term adjusted EBITDA margin of 10% or more.TISI also anticipates $10 million in annualized cost savings from the initiatives launched late in 2024, including improved workforce utilization and further operational efficiencies.Other DevelopmentsIn March 2025, Team completed a refinancing transaction that materially improved its capital structure. The company issued a $175-million First Lien Term Loan and a $50-million delayed draw term-loan facility maturing in 2030. Proceeds were used to repay $157.7 million in existing debt, including equipment and real estate loans, and incremental term loans. The remaining senior secured term loan was rolled into a $97.4-million Second Lien Term Loan maturing in 2030.Management highlighted that the refinancing extended maturities, lowered the blended interest rate by more than 100 basis points and improved liquidity, which stood at $77.4 million at the end of 2024.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Team, Inc. (TISI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks