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IndustrialsSnap-on
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XBRL · SEC EDGAR2009–2026(18yr)| Metric | FY 2009 | FY 2010 | FY 2011 | FY 2011 | FY 2012 | FY 2013 | FY 2015 | FY 2016 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2021 | FY 2022 | FY 2022 | FY 2023 | FY 2024 | FY 2026Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $2.9B | $2.4B | $2.7B | $3.0B | $3.1B | $3.2B | $3.5B | $3.6B | $3.7B | $4.0B | $4.1B | $4.1B | $3.9B | $4.6B | $4.8B | $5.1B | $5.1B | $5.2B | +0.9% |
| Gross Profit | $1.3B | $1.1B | $1.2B | $1.3B | $1.4B | $1.5B | $1.6B | $1.6B | $1.7B | $1.8B | — | — | — | — | — | — | — | — | — |
| Gross Margin | 45.0% | 43.7% | 45.2% | 44.9% | 44.9% | 45.5% | 45.4% | 45.9% | 46.1% | 45.6% | — | — | — | — | — | — | — | — | — |
| Operating Income | $388.8M | $250.7M | $331.4M | $475.1M | $516.4M | $586.2M | $684.7M | $764.8M | $854.2M | $881.5M | $956.1M | $962.3M | $880.5M | $1.1B | $1.2B | $1.3B | $1.3B | $1.3B | -1.3% |
| Operating Margin | 13.6% | 10.4% | 12.4% | 16.0% | 16.7% | 18.1% | 19.6% | 21.3% | 23.0% | 22.0% | 23.5% | 23.7% | 22.3% | 24.4% | 24.9% | 25.7% | 26.3% | 25.8% | -0.6pp |
| Net Income | $236.7M | $134.2M | $186.5M | $276.3M | $306.1M | $350.3M | $421.9M | $478.7M | $546.4M | $557.7M | $679.9M | $693.5M | $627.0M | $820.5M | $911.7M | $1.0B | $1.0B | $1.0B | -2.6% |
| Net Margin | 8.3% | 5.5% | 7.0% | 9.3% | 9.9% | 10.8% | 12.1% | 13.3% | 14.7% | 13.9% | 16.7% | 17.0% | 15.9% | 17.8% | 18.8% | 19.8% | 20.4% | 19.7% | -0.7pp |
| EPS (Diluted) | $4.07 | $2.32 | $3.19 | $4.71 | $5.20 | $5.93 | $7.14 | $8.10 | $9.20 | $9.52 | $11.87 | $12.41 | $11.44 | $14.92 | $16.82 | $18.76 | $19.51 | $19.19 | -1.6% |
1. THE BIG PICTURE
Snap-on is a high-margin specialist that has successfully branded itself as the "mark of the serious" for professional technicians, allowing it to command premium pricing in a fragmented market. While it generates nearly 20 cents of profit for every dollar of revenue, it is currently a low-growth business navigating "extraordinary turbulence" in its core U.S. automotive repair segment (8-K).
2. WHERE THE RISKS HIT HARDEST
The mobile franchise van channel, which Snap-on identifies as its primary competitive advantage for providing "direct, weekly contact" with customers (Business), is also its most concentrated risk. Because 38% of consolidated net revenues flow through these independent franchisees, any decline in their financial health or ability to collect receivables directly threatens Snap-on’s top line (Risks). Furthermore, Snap-on’s premium brand positioning is threatened by technological disruption; as alternative energy drivetrains alter vehicle repair needs, Snap-on must invest heavily in new diagnostics to avoid product obsolescence and the "margin-eroding price cuts" that would follow a loss of its technical edge (Risks, Competitive Position).
3. WHAT THE NUMBERS SAY TOGETHER
Snap-on’s financial profile reveals a business that prioritizes profitability over aggressive expansion. Its net margin of 19.9% is the second-highest in its peer group, trailing only ITW (XBRL). However, this efficiency is paired with a TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth of just 0.9%, which ranks 4th among six peers. This stagnation is most visible in the Snap-on Tools Group, which saw a 0.7% organic decline in the most recent quarter due to lower U.S. activity (8-K).
While management cites macro factors like "fluctuating tariff levels" and "unprecedented international incidents" for the sluggishness, the 6.2% short interest—with 7.0 days to cover—suggests a segment of the market is betting that these headwinds are more than temporary (Yahoo Finance). Snap-on is currently using its strong cash position to support a 2.6% dividend yield, the highest in its peer group, effectively paying investors to wait for its "coherent growth" strategy in critical industries to gain more traction (XBRL).
4. IS IT WORTH IT AT THIS PRICE?
At a 17.4x forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Snap-on trades at a 16% discount to the peer median of 20.7x (Peer Benchmarking). The market is currently pricing in approximately 2.9% long-term growth (CAPM analysis). This valuation reflects a skepticism that Snap-on can accelerate beyond its current 0.9% growth rate.
The discount is justified by Snap-on's slower growth trajectory compared to peers like HII (+8.2%) or NDSN (+3.8%). For the current price to be "right," Snap-on must prove that its expansion into "critical industries" where the "penalties for failure are high" can offset the organic declines seen in its legacy U.S. tool business (8-K). If long-term growth expectations were to align with the current 0.9% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter reality, the sensitivity analysis suggests the justified multiple would sit closer to 16.3x (CAPM analysis).
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the Snap-on Tools Group organic decline (currently -0.7%) accelerates, signaling that the franchise network is losing its grip on the U.S. technician market.
- Constructive if the Commercial & Industrial Group's organic gains in "critical industries" (currently 2.8%) move into double digits, proving Snap-on can successfully pivot away from its reliance on legacy automotive repair.
6. BOTTOM LINE
Structural Advantage: A unique, direct-to-customer mobile franchise network paired with high-switching-cost diagnostic software and "Value Creation" operational processes.
Bottom Line: Snap-on is a highly profitable but slow-growing incumbent that remains a safe haven for income, provided its independent franchisees can weather the current macro turbulence.
1. Top 5 Material Risks
- Franchisee Dependency: Approximately 38% of consolidated net revenues are generated by the Snap-on Tools Group. Snap-on’s ability to collect receivables and maintain service levels depends entirely on the success and financial health of its franchisees.
- International Exposure: With 29% of revenues generated outside the United States, Snap-on is vulnerable to political, economic, and social instability, including armed conflicts and trade sanctions, which can disrupt supply chains and lead to asset impairments.
- Competitive Pricing and Innovation: The tool and diagnostics industry is highly competitive. Snap-on must continuously invest in new products and AI to maintain its premium image; failure to do so risks market share loss and the inability to command premium pricing.
- Manufacturing and Supply Chain Disruptions: Snap-on manufactures a significant portion of its products and relies on a limited group of suppliers for specialized steel alloys and electronic components. Disruptions at these facilities or shortages of raw materials can increase costs and reduce profitability.
- Information Technology and Cybersecurity: Snap-on relies on complex ERP systems and collects sensitive proprietary and customer data. Cyberattacks or failures in system integration could interfere with order processing, manufacturing, and the collection of finance receivables.
2. Company-Specific Risks
- Vehicle Repair Market Sensitivity: Demand for Snap-on products is tied to the health of the vehicle repair market; a shift toward public transportation or a decrease in the use of privately-operated vehicles would directly reduce the demand for tools.
- Pension Plan Obligations: Snap-on sponsors defined benefit pension plans that are sensitive to interest rate fluctuations and market returns; adverse conditions may require additional cash contributions, reducing Snap-on's financial flexibility.
- Acquisition Integration: Snap-on pursues growth through acquisitions, which carries the risk of failing to realize synergies, incurring large write-offs of goodwill or intangible assets, and straining internal systems.
- Financing Alternatives: An integral part of the business model is providing financing to franchisees and end-users; the inability to offer competitive financing terms—due to market conditions or Snap-on's own credit rating—would negatively impact sales.
3. Regulatory/Legal Risks
- Financial Services Regulation: Snap-on’s financial services operations are subject to complex regulations that may limit the types of products offered, inhibit collection rights, or increase compliance costs.
- Sustainability Reporting: Regulations such as the Corporate Sustainability Reporting Directive (CSRD) in the European Union impose new compliance burdens that could increase input and operating costs.
- Government Contracting: As a government contractor, Snap-on must comply with strict purchasing regulations; failure to meet these requirements can result in civil or criminal penalties.
- Taxation: Snap-on faces risks from evolving global tax laws, including the OECD’s Pillar Two global minimum tax, and potential claims from taxing authorities regarding the interpretation of income tax laws in various jurisdictions.
4. Financial Impact Map
Franchisee Success → Consolidated Net Revenues → 38% of total revenue is tied to the Snap-on Tools Group. International Operations → Consolidated Net Revenues → 29% of total revenue is generated outside the U.S. Raw Material/Energy Costs → Operating Costs/Profitability → Price inflation in steel and energy can reduce margins if price increases do not offset costs. Pension Plan Performance → Financial Flexibility/Cash Flows → Declining interest rates or poor asset returns may require additional cash contributions. Goodwill/Intangible Assets → Shareholders’ Equity/Earnings → Deterioration in market conditions could trigger impairment charges, reducing consolidated net worth.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Jan 2026 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |