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Winners And Losers Of Q1: Herc (NYSE:HRI) Vs The Rest Of The Specialty Equipment Distributors Stocks


Kayode Omotosho /
2024/07/08 3:43 am EDT

As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the specialty equipment distributors industry, including Herc (NYSE:HRI) and its peers.

Historically, specialty equipment distributors have boasted deep selection and expertise in sometimes narrow areas like single-use packaging or unique lighting equipment. Additionally, the industry has evolved to include more automated industrial equipment and machinery over the last decade, driving efficiencies and enabling valuable data collection. Specialty equipment distributors whose offerings keep up with these trends can take share in a still-fragmented market, but like the broader industrials sector, this space is at the whim of economic cycles that impact the capital spending and manufacturing propelling industry volumes.

The 9 specialty equipment distributors stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 0.8%. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and specialty equipment distributors stocks have had a rough stretch, with share prices down 15.2% on average since the previous earnings results.

Herc (NYSE:HRI)

Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE:HRI) provides equipment rental and related services to a wide range of industries.

Herc reported revenues of $804 million, up 8.6% year on year, topping analysts' expectations by 2.4%. It was an exceptional quarter for the company, with an impressive beat of analysts' Equipment rentals revenue estimates and a decent beat of analysts' earnings estimates.

“We are off to a strong start in 2024, achieving record first-quarter revenue and adjusted EBITDA margin as we continue to capitalize on key growth markets, like semiconductor, data centers, renewables and public infrastructure, while also investing in our network scale through greenfields and acquisitions, and elevating our higher-return specialty product lines,” said Larry Silber, president and chief executive officer of Herc Rentals.

Herc Total Revenue

The stock is down 11.7% since the results and currently trades at $131.01.

Read why we think that Herc is one of the best specialty equipment distributors stocks, our full report is free.

Best Q1: Hudson Technologies (NASDAQ:HDSN)

Founded in 1991, Hudson Technologies (NASDAQ:HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.

Hudson Technologies reported revenues of $65.25 million, down 15.5% year on year, outperforming analysts' expectations by 7.5%. It was an exceptional quarter for the company, with revenue and EPS exceeding expectations.

Hudson Technologies Total Revenue

Hudson Technologies achieved the biggest analyst estimates beat among its peers. The stock is down 12.6% since the results and currently trades at $8.55.

Is now the time to buy Hudson Technologies? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Karat Packaging (NASDAQ:KRT)

Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions.

Karat Packaging reported revenues of $95.61 million, down 0.2% year on year, falling short of analysts' expectations by 4.2%. It was a weak quarter for the company, with revenue and EPS missing analysts' expectations.

The stock is down 3.5% since the results and currently trades at $27.88.

Read our full analysis of Karat Packaging's results here.

H&E Equipment Services (NASDAQ:HEES)

Founded in 1961, H&E Equipment Services (NASDAQ:HEES) provides equipment rental, sales, and maintenance services to construction and industrial sectors.

H&E Equipment Services reported revenues of $371.4 million, up 15.2% year on year, surpassing analysts' expectations by 5.3%. It was a mixed quarter for the company: H&E Equipment Services blew past analysts' revenue expectations this quarter. On the other hand, its EPS missed and its operating margin fell short of Wall Street's estimates.

The stock is down 27.9% since the results and currently trades at $42.69.

Read our full, actionable report on H&E Equipment Services here, it's free.

Richardson Electronics (NASDAQ:RELL)

Founded in 1947, Richardson Electronics (NASDAQ:RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.

Richardson Electronics reported revenues of $52.38 million, down 25.6% year on year, falling short of analysts' expectations by 6.5%. It was a mixed quarter for the company: Richardson Electronics blew past analysts' EPS expectations this quarter. On the other hand, its revenue unfortunately missed.

Richardson Electronics had the slowest revenue growth among its peers. The stock is up 27.9% since the results and currently trades at $11.94.

Read our full, actionable report on Richardson Electronics here, it's free.

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