Spotting Winners: SiteOne (NYSE:SITE) And Specialty Equipment Distributors Stocks In Q2

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 SiteOne (NYSE:SITE) and the rest of the specialty equipment distributors stocks fared in Q2.

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 weak Q2. As a group, revenues missed analysts’ consensus estimates by 1.8%.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility, and while some specialty equipment distributors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.6% since the latest earnings results.

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 $1.41 billion, up 4.4% year on year. This print exceeded analysts’ expectations by 1.8%. Despite the top-line beat, it was still a mixed quarter for the company with underwhelming EBITDA guidance for the full year.

“In early June, we communicated that our Organic Daily Sales for the second quarter were trending down 4% to 5% reflecting softer end market demand and continued price deflation. Given that trend, we were pleased to see conditions improve in June and achieve an Organic Daily Sales decline of only 3% for the quarter,” said Doug Black, SiteOne’s Chairman and CEO.

SiteOne achieved the biggest analyst estimates beat of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 5.7% since reporting and currently trades at $11.70.

Is now the time to buy SiteOne? Access our full analysis of the earnings results here, it’s free.

Best Q2: 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 $47.37 million, down 19.5% year on year, falling short of analysts’ expectations by 1.3%. However, it was still a decent quarter for the company with an impressive beat of analysts’ earnings estimates.

The market seems happy with the results as the stock is up 5.7% since reporting. It currently trades at $11.70.

Is now the time to buy Richardson Electronics? Access our full analysis of the earnings results here, it’s free.

Slowest 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 $75.28 million, down 16.8% year on year, falling short of analysts’ expectations by 4.9%. It was a weak quarter for the company with full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.

Hudson Technologies had the weakest full-year guidance update in the group. Interestingly, the stock is up 9% since the results and currently trades at $8.21.

Read our full analysis of Hudson Technologies’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 $488.1 million, up 4.2% year on year, falling short of analysts’ expectations by 3.4%. More broadly, it was a weak quarter for the company with a miss of analysts’ earnings estimates.

The stock is down 23.1% since reporting and currently trades at $6.30.

Read our full, actionable report on Alta here, it’s free.

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 $112.6 million, up 3.5% year on year, falling short of analysts’ expectations by 1.1%. Zooming out, it was a weak quarter for the company with a miss of analysts’ earnings estimates.

The stock is down 10.7% since reporting and currently trades at $25.

Read our full, actionable report on Karat Packaging here, it’s free.

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