Lindsay Gains on Solid Infrastructure Segment Demand & Acquisition

Lindsay Corporation LNN has been gaining from growth in its infrastructure business, which is being aided by the Road Zipper System leasing and the sale of road safety equipment. Increased concerns around food security are aiding LNN’s growth in the international irrigation markets. The pressing need to replace aging equipment will sustain the demand for the industry.

A solid balance sheet and new infrastructure projects will aid growth. Lindsay’s acquisition of Pessl Instruments GmbH  will boost its position as an irrigation management and scheduling solution provider in the industry.

Let us dig deeper into the factors that are driving this stock.

LNN’s Infrastructure Business Growth: Lindsay's infrastructure business is beginning to benefit from rising infrastructure spending in the United States, particularly in Road Zipper System leasing and the sale of road safety equipment. The company’s Road Zipper System is a highly differentiated product that positively delivers significant advantages by addressing key infrastructure needs, such as reducing congestion, lowering carbon emission, improving commuter travel time and increasing driver safety.

Road Zipper Systems are gaining popularity globally, given their  faster implementation and lower costs than constructing new lanes. Management’s “shift left” strategy, focused on customer engagement at the planning and design stage, has accelerated the adoption of the Road Zipper System.

The company also continues to actively manage projects through the Road Zipper System project sales funnel, even though project implementation timing remains difficult to estimate. The infrastructure segment benefited from completing a $20-million Road Zipper project in the second fiscal quarter.

Lindsay expects its infrastructure  business’ solid second-quarter performance to aid growth this year.  Road Zipper System lease revenues remain open to opportunities, backed by expected increased U.S. infrastructure funding. Despite the unpredictable project schedule, the business remains confident about the Road Zipper System sales pipeline.

Lindsay’s Pessl Acquisition: On Jan. 7, 2025, the company announced that it acquired a 49.9% minority interest in Pessl. This move will enhance LNN’s position as an irrigation management and scheduling solution provider in the industry.

In May 2023, the companies formed a collaboration to use their combined expertise to provide greater value to growers. The partnership has already demonstrated synergistic potential in unlocking incremental value and problem-solving solutions for agricultural producers globally. Lindsay will benefit from Pessl’s leading position in specialty crop applications. Customers using LNN's FieldNET and Pessl's METOS solutions will gain from advanced agronomic insights, which will provide them with informed decisions for healthier crops, optimized resource use and higher yields.

Lindsay's investment in Pessl accelerates innovation in agricultural technology, supporting efforts to meet the increasing global demands for food, fuel and fiber.

LNN’s Solid Balance Sheet: The company has a strong balance sheet that will help it navigate the current global economic uncertainty. As of Feb. 29, 2024, it had available liquidity of $236.7 million, with $186.7 million in cash, cash equivalents and marketable securities, and $50 million available under the revolving credit facility.

Lindsay’s capital allocation plan is to continue investing in organic growth and make synergistic acquisitions while enhancing shareholder returns.

Lindsay’s Plan to Manage Tariff:The company aims to implement a comprehensive action plan to manage the cost impacts of the exposure to the White House's tariff plan. This includes supplier negotiation, inventory placement and other supply-chain initiatives.

By utilizing a global footprint and supply chain, Lindsay aims to minimize potential impacts on business and customers while maintaining flexibility to react quickly to changing circumstances.

LNN Stock’s Price Performance

The company’s shares have gained 2% in the past year against the industry’s decline of 0.6%.

Image Source: Zacks Investment Research

Lindsay’s Zacks Rank & Other Stocks to Consider

LNN currently flaunts a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the Industrial Products sector are Applied Industrial Technologies, Inc. AIT, ADT Inc. ADT and ESCO Technologies Inc. ESE. These three companies have a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.

Applied Industrial has an average trailing four-quarter earnings surprise of 5.3%. The Zacks Consensus Estimate for its 2025 earnings is pinned at $9.90 per share, which indicates year-over-year growth of 1.5%. AIT shares have gained 15.8% in a year.

The Zacks Consensus Estimate for ADT’s 2025 earnings is pegged at 83 cents per share, which indicates year-over-year growth of 10.6%. The company has a trailing four-quarter average earnings surprise of 6.3%. ADT shares have gained 20.4% in a year.

The Zacks Consensus Estimate for ESCO Technologies’ 2025 earnings is pegged at $5.70 per share, which indicates year-over-year growth of 36.4%. ESE shares have gained 36.6% in a year.

Only $1 to See All Zacks' Buys and Sells

We're not kidding.

Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.

Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.

Want 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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research