This Industrial Stock Could Be Worth $25 Billion

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.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool