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Hawkins (HWKN) Up 36% in 6 Months: What's Driving the Stock?
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Hawkins, Inc.’s (HWKN - Free Report) shares have rallied 35.8% in the last six months. Owing to the upside, the stock outperformed its industry’s rise of 11.2% over the same time frame. The company has topped the S&P 500’s 8% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving this Zacks Rank #2 (Buy) stock.
What’s Going in Hawkins’ Favor?
In the second quarter of fiscal 2024, the company achieved robust results, witnessing a significant 27.9% increase in earnings from the preceding quarter’s levels. The Water Treatment segment showcased a strong performance during the quarter, marked by an impressive 17% year-over-year surge in revenues and 70% growth in operating income. This success is attributed to the profit expansion in the company's established business and recent strategic acquisitions, such as the incorporation of EcoTech Enterprises in July. The addition of EcoTech Enterprises strengthened its position in the water treatment market.
Leveraging its solid financial standing, Hawkins remained committed to enhancing its Water Treatment portfolio by acquiring six additional locations through two acquisitions after the close of the quarter. With a positive outlook for sustained growth, the company anticipates ongoing expansion in the Water Treatment segment throughout the year.
During the quarter, the company utilized record quarterly operating cash flow to repay $28.6 million in debt, resulting in a total outstanding debt of $60 million. This marks a noteworthy reduction in the debt-to-trailing twelve-month adjusted EBITDA ratio, which now stands at 0.45x, down significantly from the 0.96x recorded at the end of fiscal 2023.
Surpassing expectations, the company reported earnings of $1.10 per share in the second quarter of fiscal 2024, exceeding the Zacks Consensus Estimate of $1. This marks the fourth consecutive quarter in which the company outperformed earnings projections, with an average surprise of 27.5%.
With a positive trajectory, the consensus estimate for earnings in the current fiscal year has been revised upward by 1.7% in the past 60 days. The Zacks Consensus Estimate for fiscal 2024 earnings is pegged at $3.46 per share, indicating 20.9% growth from the previous year’s figure.
The consensus estimate for the third quarter of fiscal 2024 earnings is pegged at 61 cents. These favorable estimate revisions instill confidence among investors in the company's performance and prospects.
The consensus estimate for USAP’s current year earnings is pegged at 52 cents, indicating year-over-year growth of 170.3%. USAP beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 44.4%. The company’s shares have rallied 131% in the past year.
The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised upward by 5.1% in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 36.8% in a year.
The consensus estimate for Alamos’ current fiscal year earnings is pegged at 53 cents, indicating year-over-year growth of 89.3%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have increased 48.5% in the past year.
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Hawkins (HWKN) Up 36% in 6 Months: What's Driving the Stock?
Hawkins, Inc.’s (HWKN - Free Report) shares have rallied 35.8% in the last six months. Owing to the upside, the stock outperformed its industry’s rise of 11.2% over the same time frame. The company has topped the S&P 500’s 8% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving this Zacks Rank #2 (Buy) stock.
What’s Going in Hawkins’ Favor?
In the second quarter of fiscal 2024, the company achieved robust results, witnessing a significant 27.9% increase in earnings from the preceding quarter’s levels. The Water Treatment segment showcased a strong performance during the quarter, marked by an impressive 17% year-over-year surge in revenues and 70% growth in operating income. This success is attributed to the profit expansion in the company's established business and recent strategic acquisitions, such as the incorporation of EcoTech Enterprises in July. The addition of EcoTech Enterprises strengthened its position in the water treatment market.
Leveraging its solid financial standing, Hawkins remained committed to enhancing its Water Treatment portfolio by acquiring six additional locations through two acquisitions after the close of the quarter. With a positive outlook for sustained growth, the company anticipates ongoing expansion in the Water Treatment segment throughout the year.
During the quarter, the company utilized record quarterly operating cash flow to repay $28.6 million in debt, resulting in a total outstanding debt of $60 million. This marks a noteworthy reduction in the debt-to-trailing twelve-month adjusted EBITDA ratio, which now stands at 0.45x, down significantly from the 0.96x recorded at the end of fiscal 2023.
Surpassing expectations, the company reported earnings of $1.10 per share in the second quarter of fiscal 2024, exceeding the Zacks Consensus Estimate of $1. This marks the fourth consecutive quarter in which the company outperformed earnings projections, with an average surprise of 27.5%.
With a positive trajectory, the consensus estimate for earnings in the current fiscal year has been revised upward by 1.7% in the past 60 days. The Zacks Consensus Estimate for fiscal 2024 earnings is pegged at $3.46 per share, indicating 20.9% growth from the previous year’s figure.
The consensus estimate for the third quarter of fiscal 2024 earnings is pegged at 61 cents. These favorable estimate revisions instill confidence among investors in the company's performance and prospects.
Hawkins, Inc. Price and Consensus
Hawkins, Inc. price-consensus-chart | Hawkins, Inc. Quote
Zacks Rank & Other Key Picks
Some other top-ranked stocks in the Basic Materials space are Universal Stainless & Alloy Products, Inc. (USAP - Free Report) , The Andersons Inc. (ANDE - Free Report) and Alamos Gold Inc. (AGI - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The consensus estimate for USAP’s current year earnings is pegged at 52 cents, indicating year-over-year growth of 170.3%. USAP beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 44.4%. The company’s shares have rallied 131% in the past year.
The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised upward by 5.1% in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 36.8% in a year.
The consensus estimate for Alamos’ current fiscal year earnings is pegged at 53 cents, indicating year-over-year growth of 89.3%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have increased 48.5% in the past year.