As the Q3 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 Karat Packaging (NASDAQ:KRT) 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 slower Q3. As a group, revenues were in line with analysts’ consensus estimates.

Thankfully, share prices of the companies have been resilient as they are up 6.9% on average since the latest earnings results.

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 $112.8 million, up 6.9% year on year. This print was in line with analysts’ expectations, but overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.

“Karat performed well in the third quarter, with net sales up nearly 7 percent and volume up approximately 10 percent, despite some pricing pressure,” said Alan Yu, Chief Executive Officer.

Karat Packaging achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 4.4% since reporting and currently trades at $30.63.

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

Best Q3: 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 $53.73 million, up 2.2% year on year, outperforming analysts’ expectations by 8.7%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Richardson Electronics delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 8.5% since reporting. It currently trades at $13.99.

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

Weakest Q3: 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 $448.8 million, down 3.7% year on year, falling short of analysts’ expectations by 6.5%. It was a disappointing quarter as it posted and a significant miss of analysts’ adjusted operating income estimates.

Alta delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $7.97.

Read our full analysis of Alta’s results here.

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 $384.9 million, down 4% year on year. This result missed analysts’ expectations by 0.9%. Overall, it was a softer quarter as it also logged a significant miss of analysts’ adjusted operating income and EPS estimates.

The stock is up 4.7% since reporting and currently trades at $59.31.

Read our full, actionable report on H&E Equipment Services here, it’s free.

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 $61.94 million, down 19% year on year. This print came in 6.3% below analysts' expectations. All in all, it was a slower quarter for the company.

Hudson Technologies had the slowest revenue growth among its peers. The stock is down 17.3% since reporting and currently trades at $6.28.

Read our full, actionable report on Hudson Technologies 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 has 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 Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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