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Helios Technologies (NasdaqGS:HLIO) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Helios Technologies, Inc. (NasdaqGS:HLIO) is scheduled to report Q3 earnings results before markets open for trading on November 2, 2020.

The company is expected to report earnings of $0.41/share on revenue of $116 million. The consensus earnings per share (EPS) of $0.41/share is based on a poll of 6 analysts and represents a decline in eps of −33.1% over the same quarter last year, when the company reported earnings of $0.61/share.

The revenue forecast of $116 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −16.0%. Last year the company reported $138 million in revenue for the quarter.

Expected to report EPS contraction of −33.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $115.99 $138.04 −16.0%
EPS $0.41 $0.61 −33.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 3 quarters, and met expectations 1 quarters.

What are your expectations from Helios Technologies, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.27 $0.55 103.7% Beat
Q1, 2020 $0.40 $0.56 38.5% Beat
Q4, 2019 $0.35 $0.54 52.4% Beat
Q3, 2019 $0.58 $0.61 4.8% Beat
Q2, 2019 $0.64 $0.54 −16.0% Missed
Q1, 2019 $0.63 $0.53 −15.7% Missed
Q4, 2018 $0.39 $0.41 4.1% Beat
Q3, 2018 $0.46 $0.44 −4.9% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by increasing 4.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 3, 2020 $37.83 $39.57 4.6% Increase
May 4, 2020 $33.95 $34.70 2.2% Increase
February 24, 2020 $41.82 $41.75 −0.2% Decline
November 4, 2019 $42.04 $46.82 11.4% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.94, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.94 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Helios Technologies, Inc. is currently trading at $43.81/share, down −0.7% for the day. The company is trading at approximately 88.5% of its 52-week high of $49.49/share. The company’s stock price is up 10.7% since the last earnings report and up 1.3% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 66.01 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:HLIO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 63.11 and a forward P/E multiple of 22.66.

Helios Technologies, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.48. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 27, 2020
Stock Price (Current) $43.81
P/E Ratio 63.1x
P/E Ratio (Fwd) 22.7x
PEG Ratio −1.0
Total Debt / Total Capital 17.9%
Levered Free Cash Flow $90.539 million
EV / EBITDA 14.5x

Finbox

Helios Technologies, Inc. is a small-cap stock with a market capitalization of $1.406 billion and a total enterprise value of $1.677 billion. The company operates in the Industrials sector and the Machinery industry.

Helios Technologies, Inc. develops, manufactures, and sells solutions for the hydraulics and electronics markets in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Hydraulics and Electronics. The Hydraulics segment offers cartridge valve technology products to control rates and direction of fluid flow, and to regulate and control pressures for industrial and mobile applications; quick release hydraulic coupling solutions for the agriculture, construction equipment, and industrial markets; and hydraulic system design that provides engineered solutions for machine users, manufacturers, or designers. This segment sells its products under the Sun Hydraulics, Faster, and Custom Fluidpower brands. The Electronics segment offers displays, controls, and instrumentation products for off-highway, recreational and commercial marine, power sports and specialty vehicles, agriculture and water pumping, power generation, and engine-driven industrial equipment markets. This segment sells its products under the Enovation Controls and Murphy brands. Helios Technologies, Inc. sells its hydraulic products primarily through value-add distributors and integrators, as well as directly to original equipment manufacturer customers; and electronic products to original equipment manufacturer customers. The company was formerly known as Sun Hydraulics Corporation and changed its name to Helios Technologies, Inc. in June 2019. Helios Technologies, Inc. was founded in 1970 and is headquartered in Sarasota, Florida.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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