Hudson Tech (HDSN) AI Stock Analysis

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Hudson Tech

(NASDAQ:HDSN)

69Neutral

Hudson Technologies holds a moderate position with strengths in profitability and cash management. However, recent revenue declines and market challenges, notably in HFC pricing, present risks. The stock is fairly valued, but future performance hinges on overcoming these hurdles and capitalizing on strategic initiatives.

Positive Factors

Future Opportunities

There is potential for significant margin expansion in 2025 as the company takes advantage of current market conditions to replenish inventory with lower-cost refrigerants.

Market Position

The company is well-positioned to handle the current pricing environment due to its strong market position and balance sheet.

Negative Factors

Financial Performance

Hudson Technologies reported revenues down 19% and EPS down 42% compared to the previous year.

Guidance

Management lowered revenue guidance and expects gross margins to be lower.

Market Environment

High HFC inventory levels complicate refrigerant pricing outlook.

Hudson Tech (HDSN) vs. S&P 500 (SPY)

Market Cap

$274.28M

Dividend YieldN/A

Average Volume (3M)439.43K

Price to Earnings (P/E)12.2

Beta (1Y)0.50

Revenue Growth-17.96%

EPS Growth-53.53%

CountryUS

Employees238

SectorBasic Materials

Sector Strength59

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)0.51

Shares Outstanding44,025,110

10 Day Avg. Volume365,703

30 Day Avg. Volume439,430

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.14

Price to Cash Flow (P/CF)3.30

P/FCF Ratio3.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$6.25

Price Target Upside0.32% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Hudson Tech Business Overview & Revenue Model

Company DescriptionHudson Tech (HDSN) is a leading provider of innovative technology solutions, specializing in the design and manufacturing of advanced electronic components and systems. Operating within the technology sector, Hudson Tech delivers cutting-edge products and services to a diverse range of industries, including telecommunications, automotive, and consumer electronics. The company is known for its commitment to quality, innovation, and customer satisfaction, offering a portfolio that includes semiconductors, integrated circuits, and software solutions.

How the Company Makes MoneyHudson Tech makes money through the sale of its electronic components and systems to various industries. The company's primary revenue streams include direct sales to manufacturers and distributors, licensing agreements for its proprietary technologies, and service contracts for maintenance and support. Significant partnerships with major technology firms and OEMs (Original Equipment Manufacturers) enhance its market reach and profitability. Additionally, Hudson Tech invests in research and development to continuously innovate and expand its product offerings, thereby driving sales and maintaining competitive advantage in the marketplace.

Hudson Tech Financial Statement Overview

Summary

Hudson Tech demonstrates strong financial performance with solid profitability, effective cash flow management, and declining debt-to-equity ratio. However, the decline in revenue and asset fluctuations pose challenges to sustaining growth.

Income Statement

Positive

Hudson Tech demonstrates a strong gross profit margin and improved net profit margin over recent years. However, a decline in revenue from 2022 to 2023 indicates potential challenges in sustaining growth. While EBIT and EBITDA margins remain solid, the company must address revenue growth to maintain financial health.

Balance Sheet

Positive

The balance sheet reflects a positive trend with a decreasing debt-to-equity ratio, indicating effective leverage management. Return on equity has been commendable, though fluctuations in total assets and equity ratios suggest underlying volatility. The company's equity position is strengthening, but continued focus on asset management is essential.

Cash Flow

Positive

Hudson Tech's cash flow statement is robust, with a significant improvement in free cash flow and a strong operating cash flow to net income ratio. The free cash flow to net income ratio underscores efficient cash management, though variability in cash flow growth rates highlights potential operational uncertainties.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
237.12M	289.02M	325.23M	192.75M	147.60M
	Gross Profit
65.71M	111.51M	162.89M	71.66M	35.41M
	EBIT
29.30M	78.17M	131.51M	42.30M	5.90M
	EBITDA
29.30M	83.95M	137.49M	50.95M	13.03M
	Net Income Common Stockholders
24.39M	52.25M	103.80M	32.26M	-5.21M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
70.13M	12.45M	5.29M	3.49M	1.35M
	Total Assets
302.65M	296.67M	272.49M	215.72M	161.65M
	Total Debt
4.92M	6.68M	50.67M	100.27M	93.92M
	Net Debt
-65.22M	-5.76M	45.37M	96.78M	92.57M
	Total Liabilities
56.80M	67.90M	97.62M	144.78M	121.03M
	Stockholders Equity
245.85M	228.77M	174.88M	70.94M	40.62M
Cash Flow		Free Cash Flow
86.51M	54.97M	59.16M	-3.15M	10.22M
	Operating Cash Flow
91.81M	58.55M	62.81M	-1.23M	11.69M
	Investing Cash Flow
-25.97M	-3.58M	-3.66M	-1.92M	-470.00K
	Financing Cash Flow
-8.15M	-47.82M	-57.35M	5.29M	-12.47M

Hudson Tech Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.23

Price Trends

50DMA

5.81

Positive

100DMA

5.77

Positive

200DMA

6.77

Negative

Market Momentum

MACD

-0.06

Negative

RSI

61.78

Neutral

STOCH

65.94

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HDSN, the sentiment is Positive. The current price of 6.23 is above the 20-day moving average (MA) of 5.66, above the 50-day MA of 5.81, and below the 200-day MA of 6.77, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 61.78 is Neutral, neither overbought nor oversold. The STOCH value of 65.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HDSN.

Hudson Tech Risk Analysis

Hudson Tech disclosed 16 risk factors in its most recent earnings report. Hudson Tech reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Hudson Tech Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HDSN	69 Neutral	$274.28M	12.15	10.28%	―	-17.96%	-53.53%
Sector *	49 Neutral	$1.95B	-1.50	-22.00%	3.79%	0.66%	-27.40%
GURE	48 Neutral	$7.72M	―	-33.78%	―	-74.50%	7.21%
GEVO	47 Neutral	$285.14M	―	-15.02%	―	-1.66%	-18.31%
GPRE	46 Neutral	$231.73M	―	-9.65%	―	-25.69%	18.54%
ALTO	41 Neutral	$69.07M	―	-23.38%	―	-21.07%	-104.32%
LOOP	38 Underperform	$53.81M	―	-449.80%	―	5.45%	-155.56%

* Basic Materials Sector Average

Performance Comparison

HDSN

Hudson Tech

6.23

-4.10

-39.69%

GEVO

Gevo

1.19

0.48

67.61%

GPRE

Green Plains

3.58

-18.16

-83.53%

GURE

Gulf Resources

0.68

-0.86

-55.84%

ALTO

Alto Ingredients

0.90

-1.04

-53.61%

LOOP

Loop Industries

1.13

-1.85

-62.08%

Hudson Tech Earnings Call Summary

Earnings Call Date: Mar 6, 2025 | % Change Since: 11.05% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted Hudson Technologies' strong cash position, stock repurchase program, and increased reclaim activity, supported by favorable regulatory changes. However, significant revenue and margin declines, fourth-quarter losses, and challenges with HFC pricing indicate financial difficulties and market challenges.

Highlights

Strong Cash Position and No Debt

Hudson Technologies ended 2024 with $70 million in cash and no debt, strengthening its unlevered balance sheet.

Stock Repurchase Program

The company repurchased a total of $8.1 million of common stock in 2024, demonstrating confidence in its financial position.

Increase in Reclaim Activity

Overall reclaim activity increased by 18% in 2024, supported by the acquisition of USA Refrigerants, enhancing recovery and reclamation capabilities.

Regulatory Support for Reclaimed Refrigerants

Federal and state mandates, including those in California and New York, promote the use of reclaimed refrigerants, creating long-term opportunities.

Lowlights

Revenue and Margin Decline

Full-year revenue decreased by 18% to $237 million in 2024 compared to 2023, with gross margins declining from 39% to 28% due to lower refrigerant market prices.

Fourth Quarter Revenue Drop

Fourth-quarter revenue was $34.6 million, a 23% decrease from the same period in 2023, primarily due to lower refrigerant prices and DLA contract revenue.

Operating and Net Loss in Q4

Hudson Technologies reported an operating loss of $3.2 million and a net loss of $2.6 million in the fourth quarter of 2024, compared to income in the prior year.

HFC Pricing Challenges

HFC pricing declined up to 45% throughout 2024 with no price improvement by year-end, impacting revenue and profitability.

Company Guidance

During the conference call discussing Hudson Technologies Inc.'s financial results for the fourth quarter and year-end 2024, several key metrics and guidance for 2025 were provided. The company reported a full-year revenue of $237 million, slightly below their revised target of $240 million, and achieved their gross margin target of 28%. Notably, they ended the year with a cash position of $70 million and no debt. Despite a challenging year with HFC pricing declining up to 45%, their diverse sales channels mitigated the impact. The company repurchased $8.1 million of common stock in 2024 and saw an 18% increase in reclaim activity. For 2025, Hudson Technologies anticipates gross margins in the mid to upper twenties, with the potential for challenging comparisons in the first quarter due to pricing dynamics. They recognized $36 million in revenue from the DLA contract in 2024 and expect it to trend to normal purchasing levels in 2025. Hudson Technologies also highlighted the strategic acquisition of USA Refrigerants, which enhanced their reclamation capabilities amidst evolving regulatory mandates promoting reclaimed refrigerants.

Hudson Tech Corporate Events

Stock BuybackBusiness Operations and Strategy

Hudson Tech Expands Share Repurchase and Strategic Investments

Positive

Oct 25, 2024

Hudson Technologies has announced an increase in its share repurchase program, allowing the company to buy back up to $20 million of its common stock over 2024 and 2025. This move, reflecting confidence in the company’s growth potential, provides flexibility for strategic investments and shareholder returns. The repurchase program can be adjusted based on market conditions and other factors, and offers a strategic approach to capital allocation alongside the company’s investment in refrigerant reclamation and energy services.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.