As the Q1 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 Custom Truck One Source (NYSE: CTOS) 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 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.
Thankfully, share prices of the companies have been resilient as they are up 9.2% on average 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 trucks and heavy equipment.
Custom Truck One Source reported revenues of $422.2 million, up 2.7% year on year. This print fell short of analysts’ expectations by 3%. Overall, it was a slower quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
Custom Truck One Source achieved the highest full-year guidance raise of the whole group. The stock is up 12.2% since reporting and currently trades at $4.50.
Read our full report on Custom Truck One Source 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 an impressive beat of analysts’ EPS estimates and a solid 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 8% since reporting. It currently trades at $7.25.
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 4.6% since the results and currently trades at $94.50.
Read our full analysis of H&E Equipment Services’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 $423 million, down 4.2% year on year. This result lagged analysts' expectations by 2.3%. Aside from that, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a miss of analysts’ EPS estimates.
The stock is up 22.5% since reporting and currently trades at $5.55.
Read our full, actionable report on Alta here, it’s free.
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 missed analysts’ expectations by 1.7%. In spite of that, it was a strong quarter as it recorded an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is down 11.3% since reporting and currently trades at $8.67.
Read our full, actionable report on Richardson Electronics here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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