The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how H&E Equipment Services (NASDAQ: HEES) and the rest of the specialty equipment distributors stocks fared in Q1.
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 satisfactory Q1. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2.6% below.
In light of this news, share prices of the companies have held steady as they are up 1.2% on average since the latest earnings results.
Weakest Q1: H&E Equipment Services (NASDAQ: HEES)
Founded after recognizing a growth trend along the Mississippi River and opportunities developing in the earthmoving and construction equipment business, H&E (NASDAQ: HEES) offers machinery for companies to purchase or rent.
H&E Equipment Services reported revenues of $319.5 million, down 14% year on year. This print fell short of analysts’ expectations by 11.9%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
H&E Equipment Services delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 4.6% since reporting and currently trades at $94.50.
Read our full report on H&E Equipment Services here, it’s 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 $72.85 million, down 3.2% year on year, outperforming analysts’ expectations by 1.7%. The business had a stunning quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 14.8% since reporting. It currently trades at $9.54.
Is now the time to buy Hudson Technologies? Access our full analysis of the earnings results here, it’s free.
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 $124 million, up 10.1% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and revenue guidance for next quarter missing analysts’ expectations.
As expected, the stock is down 6.3% since the results and currently trades at $24.96.
Read our full analysis of Karat Packaging’s results here.
SiteOne (NYSE: SITE)
Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE: SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.
SiteOne reported revenues of $1.46 billion, up 3.4% year on year. This result was in line with analysts’ expectations. More broadly, it was a satisfactory quarter as it also produced full-year EBITDA guidance exceeding analysts’ expectations but a slight miss of analysts’ organic revenue estimates.
The stock is up 7.4% since reporting and currently trades at $138.03.
Read our full, actionable report on SiteOne here, it’s free.
United Rentals (NYSE: URI)
Owning the largest rental fleet in the world, United Rentals (NYSE: URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
United Rentals reported revenues of $3.94 billion, up 4.5% year on year. This print surpassed analysts’ expectations by 0.8%. It was a strong quarter as it also recorded a solid beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
The stock is up 11.4% since reporting and currently trades at $890.12.
Read our full, actionable report on United Rentals here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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