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 Q3, starting with Karat Packaging (NASDAQ: KRT).

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 satisfactory Q3. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7% 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 $124.5 million, up 10.4% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates.

“Despite ongoing trade uncertainty, we delivered another quarter of record sales, driven by strong volume growth, a favorable product mix, and continued sequential pricing improvements. We experienced double-digit growth across all major markets, especially in Texas and California,” said Alan Yu, Chief Executive Officer.

Unsurprisingly, the stock is down 7.5% since reporting and currently trades at $22.21.

Read our full report on Karat Packaging here, it’s free for active Edge members.

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 $54.61 million, up 1.6% year on year, outperforming analysts’ expectations by 6%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Richardson Electronics delivered the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3% since reporting. It currently trades at $10.29.

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

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 $422.6 million, down 5.8% year on year, falling short of analysts’ expectations by 8.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

Alta delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 17% since the results and currently trades at $4.87.

Read our full analysis of Alta’s results here.

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 $482.1 million, up 7.8% year on year. This number came in 1.5% below analysts' expectations. Taking a step back, it was still a strong quarter as it logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

Custom Truck One Source pulled off the highest full-year guidance raise among its peers. The stock is down 3% since reporting and currently trades at $6.54.

Read our full, actionable report on Custom Truck One Source here, it’s free for active Edge members.

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 $74.01 million, up 19.5% year on year. This print beat analysts’ expectations by 2.7%. It was a stunning quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

The stock is down 20.6% since reporting and currently trades at $6.85.

Read our full, actionable report on Hudson Technologies here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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