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 Richardson Electronics (NASDAQ: RELL) and the rest of the specialty equipment distributors stocks fared in Q1.
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 9 specialty equipment distributors stocks we track reported a satisfactory Q1. As a group, revenues missed analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was in line.
Luckily, specialty equipment distributors stocks have performed well with share prices up 13.8% on average since the latest earnings results.
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 $53.8 million, up 2.7% year on year. This print fell short of analysts’ expectations by 1.7%, but it was still a strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
“During the third quarter, we experienced significant year-over-year growth across key segments. Semiconductor wafer fab sales surged by 139%, while Canvys sales increased 39.5%. We achieved positive operating cash flow for the fourth consecutive quarter and ended the quarter with no debt and $36.7 million in cash and equivalents. While our cash position was bolstered by $8.2 million from the Healthcare assets sale in Q3 FY2025, the Company also generated cash from its ongoing business. We believe our strong balance sheet is an important competitive advantage with our customers and supports our long-term strategies to pursue high ROI business opportunities,” said Edward J. Richardson, Chairman, CEO, and President.
Unsurprisingly, the stock is down 3.2% since reporting and currently trades at $9.47.
Is now the time to buy Richardson Electronics? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $55.34 million, down 15.2% year on year, outperforming analysts’ expectations by 6%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Hudson Technologies pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 15.5% since reporting. It currently trades at $7.75.
Is now the time to buy Hudson Technologies? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: H&E Equipment Services (NASDAQ: HEES)
Founded after recognizing a growth trend along the Mississippi River and opportunities developing in the earthmoving and construction equipment business, H&E (NASDAQ: HEES) offers machinery for companies to purchase or rent.
H&E Equipment Services reported revenues of $319.5 million, down 14% year on year, falling short of analysts’ expectations by 11.9%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
H&E Equipment Services delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 5.9% since the results and currently trades at $95.66.
Read our full analysis of H&E Equipment Services’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 $939.4 million, up 3.8% year on year. This print beat analysts’ expectations by 0.6%. It was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is up 10% since reporting and currently trades at $125.48.
Read our full, actionable report on SiteOne here, it’s free.
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 $422.2 million, up 2.7% year on year. This result missed analysts’ expectations by 3%. It was a slower quarter as it also recorded a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Custom Truck One Source achieved the highest full-year guidance raise among its peers. The stock is up 17.7% since reporting and currently trades at $4.72.
Read our full, actionable report on Custom Truck One Source here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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