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 Custom Truck One Source (NYSE:CTOS) and the rest of the specialty equipment distributors stocks fared in Q2.
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 1.7%.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data, and specialty equipment distributors stocks have had a rough stretch. On average, share prices are down 6.9% since the latest earnings results.
Custom Truck One Source (NYSE:CTOS) Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of truck and heavy equipment, including sales, rentals, and custom modifications.
Custom Truck One Source reported revenues of $423 million, down 7.4% year on year. This print fell short of analysts’ expectations by 7.3%. Overall, it was a weak quarter for the company with full-year revenue guidance missing analysts’ expectations and underwhelming EBITDA guidance for the full year.
“Despite a sequential decline in net income, we delivered sequential Adjusted EBITDA growth in the second quarter compared to the first quarter of 2024. While we are not satisfied with our financial results for the first half of the year, we believe CTOS is well-positioned to capitalize on the secular tailwinds we see in the end markets we serve, driven by AI and data center investment, electrification, and utility grid upgrades. As we have discussed on our recent earnings calls, we continue to be impacted by a slow-down in work in our core T&D markets, which primarily impacts our ERS segment. We believe that this decline is temporary, and we are already seeing signs of improvement in the third quarter. We anticipate a return to growth in 2025,” said Ryan McMonagle, Chief Executive Officer of CTOS.
Custom Truck One Source delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 18.3% since reporting and currently trades at $3.80.
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Best Q2: 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 $47.37 million, down 19.5% year on year, falling short of analysts’ expectations by 1.3%. However, it was still a decent quarter for the company with an impressive beat of analysts’ earnings estimates.
The market seems content with the results as the stock is up 4.8% since reporting. It currently trades at $11.60.
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 posted the weakest full-year guidance update in the group. Interestingly, the stock is up 6.6% since the results and currently trades at $8.03.
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 $488.1 million, up 4.2% year on year, falling short of analysts’ expectations by 3.4%. Overall, it was a weak quarter for the company with a miss of analysts’ earnings estimates.
The stock is down 18.3% since reporting and currently trades at $6.69.
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 weaker quarter for the company with a miss of analysts’ earnings estimates.
The stock is down 4.8% since reporting and currently trades at $137.37.
This content was originally published on Stock Story
