The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how specialty equipment distributors stocks fared in Q3, starting with Richardson Electronics (NASDAQ:RELL).
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 slower Q3. As a group, revenues 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 4.8% since the latest earnings results.
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 $53.73 million, up 2.2% year on year. This print exceeded analysts’ expectations by 8.7%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
“Our first quarter results are encouraging and benefited from the strategies underway to drive sales growth, improve profitability, and generate positive operating cash flow,” said Edward J. Richardson, Chairman, CEO, and President.
Richardson Electronics scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 10.8% since reporting and currently trades at $14.28.
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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 $965 million, up 6.3% year on year, outperforming analysts’ expectations by 3.6%. The business had a strong quarter with an impressive beat of analysts’ Equipment rentals revenue estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
The market seems happy with the results as the stock is up 10.5% since reporting. It currently trades at $187.
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 $448.8 million, down 3.7% year on year, falling short of analysts’ expectations by 6.5%. It was a disappointing quarter as it posted and a significant miss of analysts’ adjusted operating income estimates.
Alta delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 18.4% since the results and currently trades at $6.55.
Titan Machinery (NASDAQ:TITN)
Founded in 1980, Titan Machinery (NASDAQ:TITN) is a distributor of agricultural and construction equipment across the United States and Europe.Titan Machinery reported revenues of $679.8 million, down 2.1% year on year. This number surpassed analysts’ expectations by 0.7%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA and EPS estimates.
The stock is down 10.1% since reporting and currently trades at $13.85.
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 $447.2 million, up 3% year on year. This result met analysts’ expectations. However, it was a softer quarter as it logged a significant miss of analysts’ adjusted operating income estimates.
Custom Truck One Source pulled off the highest full-year guidance raise among its peers. The stock is up 21.6% since reporting and currently trades at $4.84.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
