Let’s dig into the relative performance of United Rentals (NYSE: URI) and its peers as we unravel the now-completed Q3 specialty equipment distributors earnings season.

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 8 specialty equipment distributors stocks we track reported a satisfactory Q3. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

While some specialty equipment distributors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.7% since the latest earnings results.

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 $4.23 billion, up 5.9% year on year. This print exceeded analysts’ expectations by 1.6%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ organic revenue estimates but a significant miss of analysts’ EPS estimates.

Matthew Flannery, chief executive officer of United Rentals, said, “Our third-quarter results were again supported by our unrelenting focus on being the partner of choice to our customers as we serve their needs across both construction and industrial end-markets. Our team did an outstanding job as we continued to lean into growth across both our general rentals and specialty businesses, and our updated guidance reflects the momentum we expect to carry through the rest of the year.”

Unsurprisingly, the stock is down 17.9% since reporting and currently trades at $813.75.

Is now the time to buy United Rentals? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: 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 $54.61 million, up 1.6% year on year, outperforming analysts’ expectations by 6%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Richardson Electronics delivered the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 1.8% since reporting. It currently trades at $10.81.

Is now the time to buy Richardson Electronics? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Alta (NYSE: ALTG)

Founded in 1984, Alta Equipment Group (NYSE: ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.

Alta reported revenues of $422.6 million, down 5.8% year on year, falling short of analysts’ expectations by 8.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

Alta delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 15.8% since the results and currently trades at $4.95.

Read our full analysis of Alta’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 $1.26 billion, up 4.1% year on year. This number was in line with analysts’ expectations. It was a strong quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ organic revenue estimates.

The stock is up 8.7% since reporting and currently trades at $133.97.

Read our full, actionable report on SiteOne here, it’s free for active Edge members.

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 $124.5 million, up 10.4% year on year. This result met analysts’ expectations. Aside from that, it was a slower quarter as it recorded a significant miss of analysts’ EPS estimates.

The stock is down 6.5% since reporting and currently trades at $22.44.

Read our full, actionable report on Karat Packaging here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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