As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the specialty equipment distributors industry, including United Rentals (NYSE:URI) 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 10 specialty equipment distributors stocks we track reported a weak Q2. As a group, revenues missed analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 1.3% below.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. However, specialty equipment distributors stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
United Rentals (NYSE:URI) Headquartered in Stamford, CT, United Rentals (NYSE:URI) provides equipment rental and related services to various industries including construction, industrial, and infrastructure.
United Rentals reported revenues of $3.77 billion, up 6.2% year on year. This print was in line with analysts’ expectations, but overall, it was a weak quarter for the company with a miss of analysts’ earnings and organic revenue estimates.
Matthew Flannery, chief executive officer of United Rentals, said, “We were pleased with our record second-quarter results across revenue, adjusted EBITDA and EPS, as 2024 continues to play out as we expected. The integration of Yak remains on track. This acquisition builds upon our one-stop shop strategy of providing customers a best-in-class rental experience through our general rentals and specialty offerings. The team’s steadfast focus on providing this unique value proposition to our customers, coupled with an unwavering focus on safety, operational excellence and innovation, remains the cornerstone of our strategy and enables us to drive long-term shareholder value.”
United Rentals pulled off the highest full-year guidance raise of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 63.9% since reporting and currently trades at $18.68.
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Best Q2: Xometry (NASDAQ:XMTR) Calling itself the "Uber of Manufacturing", Xometry (NASDAQ:XMTR) is an online marketplace connecting manufacturers with customers who need custom parts and products.
Xometry reported revenues of $132.6 million, up 19.4% year on year, outperforming analysts’ expectations by 3.1%. It was a solid quarter for the company with an impressive beat of analysts’ earnings estimates.
Xometry delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The company added 3,026,000,000 customers to reach a total of 61.53 billion. The market seems happy with the results as the stock is up 63.9% since reporting. It currently trades at $18.68.
Slowest 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 $75.28 million, down 16.8% year on year, falling short of analysts’ expectations by 4.9%. It was a weak quarter for the company with full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.
Hudson Technologies had the weakest full-year guidance update in the group. Interestingly, the stock is up 5.2% since the results and currently trades at $7.92.
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 $1.41 billion, up 4.4% year on year, surpassing analysts’ expectations by 1.8%. More broadly, it was a mixed quarter for the company with a narrow beat of analysts’ organic revenue estimates but underwhelming EBITDA guidance for the full year.
The stock is down 5.1% since reporting and currently trades at $136.09.
Herc (NYSE:HRI) Formerly a subsidiary of Hertz (NASDAQ:HTZ) 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 $848 million, up 5.7% year on year, surpassing analysts’ expectations by 1.5%. Zooming out, it was a mixed quarter for the company with in-line EBITDA guidance for the full year but a miss of analysts’ earnings estimates.
The stock is down 6.2% since reporting and currently trades at $135.25.
This content was originally published on Stock Story
