Latest news with #HudsonTechnologies
Yahoo
16-05-2025
- Business
- Yahoo
Hudson Technologies' (NASDAQ:HDSN) Conservative Accounting Might Explain Soft Earnings
Soft earnings didn't appear to concern Hudson Technologies, Inc.'s (NASDAQ:HDSN) shareholders over the last week. Our analysis suggests that while the profits are soft, the foundations of the business are strong. Our free stock report includes 1 warning sign investors should be aware of before investing in Hudson Technologies. Read for free now. One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Over the twelve months to March 2025, Hudson Technologies recorded an accrual ratio of -0.42. Therefore, its statutory earnings were very significantly less than its free cashflow. In fact, it had free cash flow of US$101m in the last year, which was a lot more than its statutory profit of US$17.6m. Hudson Technologies shareholders are no doubt pleased that free cash flow improved over the last twelve months. Having said that, there is more to the story. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio. See our latest analysis for Hudson Technologies That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Surprisingly, given Hudson Technologies' accrual ratio implied strong cash conversion, its paper profit was actually boosted by US$2.0m in unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. If Hudson Technologies doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year. In conclusion, Hudson Technologies' accrual ratio suggests its statutory earnings are of good quality, but on the other hand the profits were boosted by unusual items. Considering all the aforementioned, we'd venture that Hudson Technologies' profit result is a pretty good guide to its true profitability, albeit a bit on the conservative side. If you want to do dive deeper into Hudson Technologies, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Hudson Technologies you should be aware of. Our examination of Hudson Technologies has focussed on certain factors that can make its earnings look better than they are. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
HDSN Q1 Earnings Call: Higher-Than-Expected Profit Despite Refrigerant Price Headwinds
Refrigerant services company Hudson Technologies (NASDAQ:HDSN) announced better-than-expected revenue in Q1 CY2025, but sales fell by 15.2% year on year to $55.34 million. Its non-GAAP profit of $0.06 per share was significantly above analysts' consensus estimates. Is now the time to buy HDSN? Find out in our full research report (it's free). Revenue: $55.34 million vs analyst estimates of $52.23 million (15.2% year-on-year decline, 6% beat) Adjusted EPS: $0.06 vs analyst estimates of $0.01 (significant beat) Adjusted EBITDA: $3.89 million vs analyst estimates of $3.6 million (7% margin, relatively in line) Operating Margin: 5.6%, down from 19.6% in the same quarter last year Free Cash Flow was $12.75 million, up from -$1.89 million in the same quarter last year Market Capitalization: $343 million Hudson Technologies' first quarter results were shaped by lower refrigerant market prices, which offset modest sales volume gains and led to a double-digit revenue decline. CEO Brian Coleman attributed the gross margin compression to continued pricing pressure for key refrigerants, particularly HFC 410A, but noted that the company saw increased reclaim activity and early benefits from the acquisition of USA Refrigerants. Coleman remarked, 'We are pleased to have started 2025 with slightly improved sales volume… but we did see a revenue decline as expected.' Looking ahead, management is monitoring the impact of new tariffs and regulatory changes on both supply costs and demand dynamics. Coleman highlighted that ongoing supply chain disruptions and the evolving regulatory environment—specifically the AIM Act's phasedown of HFCs—are introducing uncertainty into both pricing and market demand. He added, 'The current situation is creating uncertainty, both for our costs and for our prices to our customers,' emphasizing the need for vigilance as the cooling season progresses. The first quarter saw Hudson Technologies experience a notable decline in revenue, primarily due to lower refrigerant pricing that outweighed gains in sales volume. Management provided additional context on the drivers of this performance, highlighting several industry and company-specific developments. Refrigerant price declines: Refrigerant prices, especially for HFC 410A (which makes up roughly 70% of aftermarket HFC demand), were about 40% lower than the prior year. Management cited both supply chain disruptions and increased tariff-related costs as major contributors to this environment. Reclamation volume growth: The company reported higher reclaim volumes, attributing this to both the acquisition of USA Refrigerants and increased industry focus on recovery and reclamation. Management believes ongoing educational efforts and new regulatory requirements supporting reclamation are beginning to shift contractor behavior. Tariffs and supply chain disruptions: Tariffs on imported refrigerants and raw materials, particularly steel for cylinders, have increased costs for both virgin and next-generation refrigerants. These costs are being passed through the distribution chain, but with some uncertainty as to how lasting the impact will be. Transition to lower-GWP refrigerants: The industry is currently navigating the Technology Transition Rule, which mandates a shift from higher-global warming potential (GWP) HFCs to lower-GWP alternatives. Management noted that demand for new refrigerants is outpacing supply, leading to short-term shortages and elevated costs. Balance sheet and capital allocation: The company ended the quarter with $81 million in cash and no debt, providing flexibility for ongoing buybacks, potential acquisitions, and investment in organic growth. Hudson has repurchased $4.5 million in stock so far in 2025. Management's outlook for the coming quarters is shaped by ongoing regulatory changes, evolving supply-demand dynamics for refrigerants, and the company's ability to adapt to cost pressures and capitalize on reclamation opportunities. Regulatory and tariff impacts: The evolving tariff landscape and the EPA's review of AIM Act regulations are expected to drive both supply-side costs and customer pricing. Management noted ongoing uncertainty about the duration and magnitude of these impacts. HFC phasedown and reclamation: Mandatory reductions in virgin HFC supply and new municipal requirements for reclaimed refrigerants are expected to support long-term demand for Hudson's reclamation services, though timing and adoption rates remain variable. Seasonal and weather-related demand: Management emphasized that cooling season weather patterns will heavily influence short-term demand. The company will have more visibility into supply-demand balance and pricing stability as temperatures rise in major markets. Ryan Sigdahl (Craig-Hallum): Asked whether recent price increases are driven solely by tariffs or reflect lasting market changes. CEO Brian Coleman responded that supply chain disruptions and tariffs are currently pushing prices higher, but it is too early to determine if this is temporary or a new trend. Ryan Sigdahl (Craig-Hallum): Inquired about the impact of cylinder shortages and inflation on margins, given Hudson's large inventory of reusable cylinders. Coleman noted Hudson's relative advantages but highlighted new requirements for cylinder valves and ongoing supply disruptions that could affect margin. Ryan Sigdahl (Craig-Hallum): Questioned whether macroeconomic factors are accelerating reclamation. Coleman reported double-digit reclaim volume growth in Q1, driven more by contractor education and partnerships than by tariffs or inflation alone. Austin Moeller (Canaccord): Asked about the effect of tariffs on refrigerant imports from Mexico. Coleman explained that limited Mexican production means tariffs on India and China have a larger market impact than USMCA rules. Matthew (B. Riley Securities): Sought clarification on DLA contract cadence and inventory normalization. Coleman stated that DLA contract volumes remain steady and inventory levels are approaching normalization. In the coming quarters, the StockStory team will be monitoring (1) the pace of price stabilization or additional volatility in refrigerant markets as the core cooling season unfolds, (2) tangible progress in the adoption of reclaimed refrigerants—especially in response to new municipal and regulatory mandates, and (3) Hudson's ability to pass through higher supply-side costs without further margin erosion. Ongoing regulatory developments tied to the AIM Act and EPA review will also be key factors to watch. Hudson Technologies currently trades at a forward EV-to-EBITDA ratio of 10.1×. At this valuation, is it a buy or sell post earnings? The answer lies in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
Hudson Technologies (NASDAQ:HDSN) Delivers Strong Q1 Numbers
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Hudson Technologies's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 15.5% annually. Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Hudson Technologies's sales grew at a mediocre 6.8% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector and is a tough starting point for our analysis. Brian F. Coleman, President and Chief Executive Officer of Hudson Technologies commented, 'First quarter 2025 revenue reflected a slight increase in refrigerant sales volume, which was more than offset by lower overall refrigerant market pricing as compared to last year's first quarter. First quarter 2025 sequential market pricing declined slightly from the fourth quarter of 2024, contributing to gross margin of 22%. We expect to be on track for our mid-twenty percent expected gross margin as we move through the core portion of the nine-month selling season. Additionally, we saw continued strength in the refrigerant recovery activities that feed our reclamation business, bolstered by our strengthened capabilities from the strategic acquisition of USA Refrigerants last year. We are pleased with the start to 2025 and remain focused on successfully executing on the elements of our business that we can control – most importantly by ensuring that our customers have the refrigerants they need as the weather turns warmer and the cooling season gets fully underway. Free Cash Flow was $12.75 million, up from -$1.89 million in the same quarter last year Operating Margin: 5.6%, down from 19.6% in the same quarter last year Is now the time to buy Hudson Technologies? Find out in our full research report . Refrigerant services company Hudson Technologies (NASDAQ:HDSN) reported Q1 CY2025 results topping the market's revenue expectations , but sales fell by 15.2% year on year to $55.34 million. Its GAAP profit of $0.06 per share was in line with analysts' consensus estimates. Story Continues Hudson Technologies Year-On-Year Revenue Growth This quarter, Hudson Technologies's revenue fell by 15.2% year on year to $55.34 million but beat Wall Street's estimates by 6%. Looking ahead, sell-side analysts expect revenue to grow 5.7% over the next 12 months. Although this projection implies its newer products and services will spur better top-line performance, it is still below the sector average. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Operating Margin Hudson Technologies has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 24%. This result isn't surprising as its high gross margin gives it a favorable starting point. Analyzing the trend in its profitability, Hudson Technologies's operating margin rose by 3.8 percentage points over the last five years, as its sales growth gave it operating leverage. Hudson Technologies Trailing 12-Month Operating Margin (GAAP) In Q1, Hudson Technologies generated an operating profit margin of 5.6%, down 14 percentage points year on year. Since Hudson Technologies's operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased. Earnings Per Share We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Hudson Technologies's full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it's at a critical moment in its life. Hudson Technologies Trailing 12-Month EPS (GAAP) Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. Sadly for Hudson Technologies, its EPS declined by more than its revenue over the last two years, dropping 55.9%. This tells us the company struggled to adjust to shrinking demand. We can take a deeper look into Hudson Technologies's earnings to better understand the drivers of its performance. Hudson Technologies's operating margin has declined by 23.8 percentage points over the last two years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. In Q1, Hudson Technologies reported EPS at $0.06, down from $0.20 in the same quarter last year. Despite falling year on year, this print easily cleared analysts' estimates. Over the next 12 months, Wall Street expects Hudson Technologies to perform poorly. Analysts forecast its full-year EPS of $0.37 will hit $0.50. Key Takeaways from Hudson Technologies's Q1 Results We were impressed by how significantly Hudson Technologies blew past analysts' revenue expectations this quarter. We were also glad its EPS outperformed Wall Street's estimates. Zooming out, we think this was a solid print. The stock traded up 1.3% to $6.80 immediately after reporting. Hudson Technologies may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
27-04-2025
- Business
- Yahoo
Calculating The Fair Value Of Hudson Technologies, Inc. (NASDAQ:HDSN)
The projected fair value for Hudson Technologies is US$5.78 based on 2 Stage Free Cash Flow to Equity Current share price of US$6.23 suggests Hudson Technologies is potentially trading close to its fair value Analyst price target for HDSN is US$6.56, which is 14% above our fair value estimate Today we will run through one way of estimating the intrinsic value of Hudson Technologies, Inc. (NASDAQ:HDSN) by taking the forecast future cash flows of the company and discounting them back to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$14.3m US$13.5m US$13.1m US$12.9m US$12.9m US$13.0m US$13.2m US$13.4m US$13.7m US$14.0m Growth Rate Estimate Source Analyst x1 Analyst x1 Est @ -2.98% Est @ -1.26% Est @ -0.06% Est @ 0.78% Est @ 1.37% Est @ 1.79% Est @ 2.08% Est @ 2.28% Present Value ($, Millions) Discounted @ 7.2% US$13.3 US$11.7 US$10.6 US$9.8 US$9.1 US$8.6 US$8.1 US$7.7 US$7.3 US$7.0 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$93m After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.8%. We discount the terminal cash flows to today's value at a cost of equity of 7.2%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$14m× (1 + 2.8%) ÷ (7.2%– 2.8%) = US$323m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$323m÷ ( 1 + 7.2%)10= US$161m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$254m. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$6.2, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Hudson Technologies as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.2%, which is based on a levered beta of 1.027. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Hudson Technologies Strength Currently debt free. Weakness Earnings declined over the past year. Expensive based on P/E ratio and estimated fair value. Opportunity Annual earnings are forecast to grow for the next 2 years. Threat Annual earnings are forecast to grow slower than the American market. Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Hudson Technologies, we've put together three essential elements you should further research: Risks: Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hudson Technologies , and understanding this should be part of your investment process. Future Earnings: How does HDSN's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQCM every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
15-04-2025
- Automotive
- Yahoo
1 Industrials Stock on Our Buy List and 2 to Approach with Caution
Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates), and the market seems convinced that demand will slow. Due to this bearish outlook, the industry has tumbled by 15.4% over the past six months. This performance was worse than the S&P 500's 7.1% fall. The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here is one resilient industrials stock at the top of our wish list and two that may face trouble. Market Cap: $254 million Founded in 1991, Hudson Technologies (NASDAQ:HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling. Why Does HDSN Worry Us? Products and services are facing significant end-market challenges during this cycle as sales have declined by 14.6% annually over the last two years Forecasted revenue decline of 4.1% for the upcoming 12 months implies demand will fall even further Earnings per share have contracted by 48.2% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance Hudson Technologies is trading at $5.80 per share, or 14.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why HDSN doesn't pass our bar. Market Cap: $76.77 million One of the first EV charging companies to go public, Blink Charging (NASDAQ:BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services. Why Are We Cautious About BLNK? Issuance of new shares over the last five years caused its earnings per share to fall by 10.2% annually while its revenue grew Cash-burning history makes us doubt the long-term viability of its business model Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders Blink Charging's stock price of $0.78 implies a valuation ratio of 0.6x forward price-to-sales. Read our free research report to see why you should think twice about including BLNK in your portfolio, it's free. Market Cap: $6.84 billion Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings. Why Should You Buy AAON? Impressive 16.2% annual revenue growth over the last two years indicates it's winning market share this cycle Earnings per share have massively outperformed its peers over the last two years, increasing by 27.7% annually Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures At $85.80 per share, AAON trades at 28.7x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
