It has been about a month since the last earnings report for Trimble Navigation (TRMB Quick QuoteTRMB - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Trimble due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Trimble Q4 Earnings and Revenues Trump Estimates

Trimble Inc. reported fourth-quarter 2020 non-GAAP earnings of 61 cents per share, which beat the Zacks Consensus Estimate by 17.3%. Notably, the bottom line improved 1.7% sequentially and 15.1% year over year.

Per management, non-GAAP revenues were up 0.4% year over year to $830 million.

Further, the company’s GAAP revenues were $829.7 million, which surpassed the Zacks Consensus Estimate by 5.3%. Also, the figure was up 1% year over year.

The top line was driven by strength in overall demand environment. Further, strong segmental performance aided the results.

Product revenues (accounting for 59.1% of GAAP revenues) totaled $490.4 million, up 5.1% on a year-over-year basis. Services revenues (19.9% of revenues) were $165.1 million, down 10.5 % year over year. Subscription revenues (21% of revenues) improved 0.6% from the year-ago quarter to $174.2 million.

Its cost-control strategies are expected to drive profitability in the near term. Further, the company’s acquisition strategy remains a major positive and is likely to aid the stock to rebound in the long haul.

Operating Details

For the fourth quarter, non-GAAP gross margin came in at 59.4%, expanding 40 basis points (bps) year over year.

Adjusted operating expenses accounted for 35.7% of non-GAAP revenues, contracting 150 bps from the year-ago quarter. The decrease was due to structural actions and temporary factors associated with the COVID-19 pandemic.

Consequently, non-GAAP operating margin came in at 23.7%, which expanded 190 bps year over year.

Balance Sheet

At the end of fourth-quarter 2020, cash and cash equivalents were $237.7 million, up from $184 million at the end of third-quarter 2020. Inventories were $301.7 million, down from $318.5 million in the previous quarter.

Long-term debt was $1.29 billion at fourth quarter-end compared with $1.39 billion at third quarter-end.

Further, the company generated $188 million of cash from operations compared with $181 million in the third quarter.

Trimble generated free cash flow of $177 million for the reported quarter.

Guidance

For full-year 2021, it expects GAAP revenues in the range of $3.3-$3.4 billion and GAAP earnings within $1.31-$1.54 per share.

Non-GAAP revenues are expected in the range of $3.3-$3.4 billion and non-GAAP earnings per share within $2.25-$2.45.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Trimble has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Trimble has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.