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 Richardson Electronics (NASDAQ:RELL) 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 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. On average, they are relatively unchanged 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 $51.89 million, up 9.5% year on year. This print fell short of analysts’ expectations by 3.7%, 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.
Richardson Electronics delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 1.6% since reporting and currently trades at $9.95.
Is now the time to buy Richardson Electronics? 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 solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 15.4% since reporting. It currently trades at $9.59.
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 6% since the results and currently trades at $25.06.
Read our full analysis of Karat Packaging’s results here.
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 number surpassed analysts’ expectations by 0.6%. It was an exceptional quarter as it also put up an impressive beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 8.4% since reporting and currently trades at $7.74.
Read our full, actionable report on Alta 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 $511.5 million, up 20.9% year on year. This print topped analysts’ expectations by 9.6%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income 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 flat since reporting and currently trades at $5.70.
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.
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