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Shares of Hudson Technologies (HDSN - Free Report) scaled a fresh 52-week high of $11.85 on Nov 28, before closing the session at $10.86.
The company, sporting a Zacks Rank #1 (Strong Buy), has a market capitalization of around $509 million. HDSN’s long-term expected growth rate of 30% is higher than the industry’s growth projection of 16%.
Hudson Technologies’ shares have soared 188.1% in a year against the industry’s decline of 10.5% and the S&P 500’s fall of 13.4%.
Image Source: Zacks Investment Research
What’s Driving Hudson Technologies?
Hudson Technologies is witnessing an upward trend in its stock price, prompted by solid results so far this year. The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 297%. The company has delivered year-over-year improvement in earnings over the past four quarters.
Hudson Technologies’ third quarter 2022 revenues improved 48% year over year to a record $89.5 million. This was mainly driven by increased selling prices for certain refrigerants.
The company meanwhile has not witnessed a material appreciation in the cost of certain refrigerants sold. This led to a 65% surge in its earnings per share to 56 cents in the quarter.
Backed by its improved profitability and a strong free cash flow, the company has lowered its total debt, thereby strengthening its balance sheet and improving financial flexibility.
HDSN is expected to gain from the surge in demand for reclaimed refrigerants due to the phasedown of production and consumption of Hydrofluorocarbons (HFCs) in the United States as mandated by the AIM Act. HFCs are potent greenhouse gases used in refrigerators, air conditioners, and other applications.
A 10% stepdown instructed for 2022 and 2023 and a 40% baseline reduction in virgin production starting in 2024 has increased the industry’s reliance on reclaimed refrigerant to meet its HFC needs. Hudson Technologies has been the leader in refrigerant reclamation for nearly three decades and is well poised to meet this demand. This is expected to contribute to its share price performance going ahead.
Earnings estimates for Hudson Technologies have also been going up in the past months. The Zacks Consensus Estimate for 2022 has increased around 21%, while the same for 2023 has gone up 25%. The favorable estimate revisions instill investors’ optimism in the stock.
Enerpac Tool Group has an earnings growth estimate of 44.6% for the current year. The estimates have been unchanged over the past 30 days. EPAC’s shares have rallied 14.6% over the year. It has a trailing four-quarter surprise of 3.4%, on average.
Hubbell has an average trailing four-quarter earnings surprise of 10.6%. The stock has gained 28.4% in the past year. HUBB’s earnings growth estimate for fiscal 2022 is 6.7%. The consensus mark has been revised 4.8% upward in the past 30 days.
W.W. Grainger has a trailing four-quarter surprise of 10.1%, on average. The Zacks Consensus Estimate for GWW’s 2022 earnings stands at 16.6% growth from the year-ago reported number. The consensus estimate has increased 4.1% over the past 30 days. The stock has jumped 22% in the past year.
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Hudson Technologies (HDSN) Hits 52-Week High: What's Driving It?
Shares of Hudson Technologies (HDSN - Free Report) scaled a fresh 52-week high of $11.85 on Nov 28, before closing the session at $10.86.
The company, sporting a Zacks Rank #1 (Strong Buy), has a market capitalization of around $509 million. HDSN’s long-term expected growth rate of 30% is higher than the industry’s growth projection of 16%.
Hudson Technologies’ shares have soared 188.1% in a year against the industry’s decline of 10.5% and the S&P 500’s fall of 13.4%.
Image Source: Zacks Investment Research
What’s Driving Hudson Technologies?
Hudson Technologies is witnessing an upward trend in its stock price, prompted by solid results so far this year. The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 297%. The company has delivered year-over-year improvement in earnings over the past four quarters.
Hudson Technologies’ third quarter 2022 revenues improved 48% year over year to a record $89.5 million. This was mainly driven by increased selling prices for certain refrigerants.
The company meanwhile has not witnessed a material appreciation in the cost of certain refrigerants sold. This led to a 65% surge in its earnings per share to 56 cents in the quarter.
Backed by its improved profitability and a strong free cash flow, the company has lowered its total debt, thereby strengthening its balance sheet and improving financial flexibility.
HDSN is expected to gain from the surge in demand for reclaimed refrigerants due to the phasedown of production and consumption of Hydrofluorocarbons (HFCs) in the United States as mandated by the AIM Act. HFCs are potent greenhouse gases used in refrigerators, air conditioners, and other applications.
A 10% stepdown instructed for 2022 and 2023 and a 40% baseline reduction in virgin production starting in 2024 has increased the industry’s reliance on reclaimed refrigerant to meet its HFC needs. Hudson Technologies has been the leader in refrigerant reclamation for nearly three decades and is well poised to meet this demand. This is expected to contribute to its share price performance going ahead.
Earnings estimates for Hudson Technologies have also been going up in the past months. The Zacks Consensus Estimate for 2022 has increased around 21%, while the same for 2023 has gone up 25%. The favorable estimate revisions instill investors’ optimism in the stock.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are Enerpac Tool Group (EPAC - Free Report) , Hubbell (HUBB - Free Report) and W.W. Grainger (GWW - Free Report) . While EPAC and HUBB sport a Zacks Rank of 1, GWW holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Enerpac Tool Group has an earnings growth estimate of 44.6% for the current year. The estimates have been unchanged over the past 30 days. EPAC’s shares have rallied 14.6% over the year. It has a trailing four-quarter surprise of 3.4%, on average.
Hubbell has an average trailing four-quarter earnings surprise of 10.6%. The stock has gained 28.4% in the past year. HUBB’s earnings growth estimate for fiscal 2022 is 6.7%. The consensus mark has been revised 4.8% upward in the past 30 days.
W.W. Grainger has a trailing four-quarter surprise of 10.1%, on average. The Zacks Consensus Estimate for GWW’s 2022 earnings stands at 16.6% growth from the year-ago reported number. The consensus estimate has increased 4.1% over the past 30 days. The stock has jumped 22% in the past year.