Let’s dig into the relative performance of Alta (NYSE: ALTG) and its peers as we unravel the now-completed Q2 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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 2% 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 4.2% on average since the latest earnings results.
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 $481.2 million, down 1.4% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS and adjusted operating income estimates.
Interestingly, the stock is up 4.6% since reporting and currently trades at $7.47.
Is now the time to buy Alta? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 and EBITDA estimates.
The market seems happy with the results as the stock is up 19.6% since reporting. It currently trades at $9.94.
Is now the time to buy Hudson Technologies? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 7.2% since the results and currently trades at $24.74.
Read our full analysis of Karat Packaging’s results here.
Custom Truck One Source (NYSE: CTOS)
Inspired by a family gas station, Custom Truck One Source (NYSE: CTOS) is a distributor of trucks and heavy equipment.
Custom Truck One Source reported revenues of $511.5 million, up 20.9% year on year. This print beat analysts’ expectations by 9.6%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates.
Custom Truck One Source delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 5.5% since reporting and currently trades at $6.02.
Read our full, actionable report on Custom Truck One Source 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 $51.89 million, up 9.5% year on year. This result lagged analysts' expectations by 3.7%. Taking a step back, it was still a strong quarter as it put up a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Richardson Electronics had the weakest performance against analyst estimates among its peers. The stock is up 5.7% since reporting and currently trades at $10.35.
Read our full, actionable report on Richardson Electronics 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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