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 Q2, starting with Herc (NYSE: HRI).
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.
Thankfully, share prices of the companies have been resilient as they are up 6.6% on average since the latest earnings results.
Herc (NYSE: HRI)
Formerly a subsidiary of Hertz 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 $1.00 billion, up 18.2% year on year. This print exceeded analysts’ expectations by 6.9%. Despite the top-line beat, it was still a slower quarter for the company with full-year revenue guidance missing analysts’ expectations significantly and full-year EBITDA guidance missing analysts’ expectations.
“The second quarter marked an important milestone for our company. On June 2nd, we completed the transaction to bring Herc Rentals and H&E Equipment Services together. This acquisition, the largest in the industry, will accelerate our strategy to deliver market leading growth and superior value creation by providing geographic and customer diversification, a substantially expanded footprint in key regions with economies of scale, and a larger fleet to strengthen our position as a premier rental company in North America,” said Larry Silber, president and chief executive officer.
Herc delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 14.1% since reporting and currently trades at $128.90.
Read our full report on Herc 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 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 23.1% since reporting. It currently trades at $10.23.
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 7.1% since the results and currently trades at $24.76.
Read our full analysis of Karat Packaging’s results here.
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 result lagged analysts' expectations by 3.7%. More broadly, it was actually a strong quarter as it logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Richardson Electronics had the weakest performance against analyst estimates among its peers. The stock is flat since reporting and currently trades at $9.75.
Read our full, actionable report on Richardson Electronics here, it’s free.
United Rentals (NYSE: URI)
Owning the largest rental fleet in the world, United Rentals (NYSE: URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
United Rentals reported revenues of $3.94 billion, up 4.5% year on year. This number beat analysts’ expectations by 0.8%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
The stock is up 18.3% since reporting and currently trades at $945.31.
Read our full, actionable report on United Rentals here, it’s free.
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 thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
