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Helios Technologies Inc (HLIO)
:HLIO
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Helios Technologies
(NYSE:HLIO)
62Neutral
Positive Factors
Earnings
Helios Technologies reported 4Q24 revenue of $179.5 million, beating both Stifel and Street expectations.
Financial Performance
Adjusted EPS of $0.59 came in above the $0.54 consensus and the $0.51 estimate.
Negative Factors
Guidance
The company's 2024 guidance was lowered, with sales expected to drop by $35 million and EBITDA by $13.5 million at midpoints.
Market Conditions
Helios Technologies is battling an extended demand downcycle that has lasted more than two years.
Helios Technologies (HLIO) vs. S&P 500 (SPY)
Market Cap
$922.63M
Dividend Yield1.3%
Average Volume (3M)225.01K
Price to Earnings (P/E)23.7
Beta (1Y)0.78
Revenue Growth-3.55%
EPS Growth2.73%
CountryUS
Employees2,500
SectorIndustrials
Sector Strength66
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.17
Shares Outstanding33,296,060
10 Day Avg. Volume255,161
30 Day Avg. Volume225,007
Financial Highlights & Ratios
PEG Ratio8.68
Price to Book (P/B)N/A
Price to Sales (P/S)1.39
Price to Cash Flow (P/CF)7.80
P/FCF Ratio9.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$58.00Price Target Upside109.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Helios Technologies Business Overview & Revenue Model
Company DescriptionHelios Technologies, Inc., together with its subsidiaries, 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 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, health and wellness, and engine-driven industrial equipment markets. This segment sells its products under the Enovation Controls, Murphy, and Balboa Water Group brands. It sells its hydraulic products primarily through value-add distributors, as well as directly to original equipment manufacturers; 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.
How the Company Makes MoneyHelios Technologies generates revenue through the sale of its motion control and electronic control solutions. The company's key revenue streams are derived from its Hydraulics segment, which includes hydraulic valves and quick release couplings, and its Electronics segment, which provides electronic controls and displays. Helios Technologies benefits from a diverse customer base across different industries, which reduces dependency on any single market. Significant partnerships and continued innovation contribute to the company's earnings by expanding its product offerings and reaching new markets. The company also emphasizes strategic acquisitions to enhance its product portfolio and market reach.
Helios Technologies Financial Statement Overview
Summary
Overall, Helios Technologies demonstrates a stable financial position with strong cash flow generation capabilities and low leverage. While revenue and net income have shown some decline, the company maintains a healthy balance sheet with substantial equity. The focus should be on enhancing operational efficiency to improve profitability metrics.Income Statement
Helios Technologies has experienced fluctuating revenue with a notable decline from $885.4M in 2022 to $805.9M in 2024. The Gross Profit Margin stood at approximately 31.3% in 2024, reflecting stable profitability. Despite this, the Net Profit Margin for 2024 was lower at 4.8%, indicating room for improvement in cost management or operational efficiency.72
Positive
Balance Sheet
The company maintains a solid equity position with a Debt-to-Equity Ratio of 0.19 in 2024, indicating low leverage. However, the Return on Equity (ROE) has decreased to 4.5% in 2024, suggesting reduced profitability relative to equity. The Equity Ratio is robust at 57.4%, showcasing financial stability and a strong asset base.65
Positive
Cash Flow
Helios Technologies has shown strong Free Cash Flow growth with an increase from $43.5M in 2023 to $95.1M in 2024. The Operating Cash Flow to Net Income Ratio is 3.13, indicating effective cash generation from operations. This robust cash flow performance underpins the company's ability to invest and manage its financial obligations.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 805.90M | 835.60M | 885.40M | 869.18M | 523.04M | Gross Profit |
| 252.30M | 261.70M | 298.50M | 312.81M | 196.23M | EBIT |
| 81.80M | 79.90M | 137.30M | 149.31M | 97.60M | EBITDA |
| 81.80M | 144.20M | 189.30M | 198.00M | 73.31M | Net Income Common Stockholders |
| 39.00M | 37.50M | 98.40M | 104.60M | 14.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 44.10M | 32.40M | 43.70M | 28.54M | 25.22M | Total Assets |
| 1.51B | 1.59B | 1.46B | 1.42B | 1.30B | Total Debt |
| 163.30M | 548.50M | 444.50M | 444.33M | 462.07M | Net Debt |
| 119.20M | 516.10M | 400.80M | 415.79M | 436.85M | Total Liabilities |
| 641.00M | 735.80M | 668.80M | 706.38M | 689.19M | Stockholders Equity |
| 864.40M | 854.60M | 794.90M | 708.96M | 607.79M |
| Cash Flow | Free Cash Flow | |||
| 95.10M | 43.50M | 74.90M | 83.91M | 93.11M | Operating Cash Flow |
| 122.10M | 83.90M | 109.90M | 113.20M | 108.56M | Investing Cash Flow |
| -30.30M | -153.90M | -90.80M | -90.27M | -235.90M | Financing Cash Flow |
| -78.40M | 57.90M | -6.90M | -22.60M | 137.74M |
Helios Technologies Technical Analysis
Negative
27.71
Price Trends
38.56
Negative
43.71
Negative
44.52
Negative
Market Momentum
-1.98
Positive
23.59
Positive
13.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLIO, the sentiment is Negative. The current price of 27.71 is below the 20-day moving average (MA) of 34.25, below the 50-day MA of 38.56, and below the 200-day MA of 44.52, indicating a bearish trend. The MACD of -1.98 indicates Positive momentum. The RSI at 23.59 is Positive, neither overbought nor oversold. The STOCH value of 13.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HLIO.
Helios Technologies Risk Analysis
Helios Technologies disclosed 33 risk factors in its most recent earnings report. Helios Technologies reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Helios Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $9.73B | 18.98 | 19.60% | 1.09% | 10.59% | 27.04% | |
77 Outperform | $24.19B | 9.07 | 24.30% | 1.26% | -2.99% | 159.26% | |
75 Outperform | $6.48B | 23.02 | 14.34% | 1.93% | 5.49% | 51.02% | |
69 Neutral | $27.04B | 29.76 | 26.22% | 2.14% | -11.28% | -23.69% | |
67 Neutral | $12.74B | 25.35 | 13.77% | 1.64% | -0.16% | -15.42% | |
62 Neutral | $922.63M | 23.66 | 4.54% | 1.30% | -3.55% | 2.73% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% |
* Industrials Sector Average
Performance Comparison
HLIO
Helios Technologies
27.71
-16.49
-37.31%
DOV
Dover
162.73
-11.23
-6.46%
FLS
Flowserve
43.60
-3.51
-7.45%
IEX
IDEX
168.68
-67.61
-28.61%
ITT
ITT
119.56
-11.80
-8.98%
ROK
Rockwell Automation
239.16
-34.95
-12.75%
Helios Technologies Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -28.60% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in operational efficiency and new product launches, alongside strong cash generation and debt reduction. However, these were tempered by sales declines, higher tax rates, possible tariff impacts, and ongoing challenges in key markets. The sentiment is balanced with both positive achievements and notable challenges.Highlights
New Product Launches
Helios launched eleven new cartridge valves on the hydraulic side and introduced new electronic displays and solutions, including PowerView U150, PowerView U120, Cendercan Plus, and PowerView U35.
Operational Efficiency and Cost Control
Despite a 7% decline in sales for the quarter, gross margin expanded by 150 basis points over last year. Operating income in the fourth quarter grew 12%, and adjusted EBITDA margin expanded 70 basis points over the prior year period.
Record Cash Generation
Helios achieved record cash from operations of $122 million for the year, with a free cash flow conversion rate of 244%.
Debt Reduction
Total debt was reduced by 14% or $75 million, with consistent reductions over the last six quarters, improving financial flexibility.
Lowlights
Sales Decline
Sales were down 4% for the year, with the fourth quarter sales at $180 million, reflecting continued weakness in agriculture, mobile, and industrial markets.
Higher Effective Tax Rate
The effective tax rate in the fourth quarter was 37.2%, higher than expected due to changes in the income mix in various tax jurisdictions.
Impact of Tariffs
Potential impacts of tariff regulations are being evaluated, with concerns about cost increases and supply chain disruptions.
Challenges in Key Markets
Weakness in agriculture and mobile end markets affected hydraulic sales, which declined 10% over the prior year period.
Company Guidance
During the Helios Technologies Fourth Quarter 2024 Financial Results call, the company provided guidance for fiscal year 2025, projecting sales in the range of $775 million to $825 million. Adjusted EBITDA is expected to be between $140 million and $165 million. The company aims to improve gross margins to the mid-to-high 30% range, contingent on volume growth. Helios plans to reduce net debt to adjusted EBITDA leverage ratio from the current 2.6 times and maintain capital expenditures at 3.25% to 3.75% of sales. The first quarter of 2025 is expected to see sales between $185 million and $190 million, with an adjusted EBITDA margin ranging from 16% to 17%. Helios is also implementing a share repurchase program worth up to $100 million, highlighting a commitment to disciplined capital allocation strategies.Helios Technologies Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Helios Technologies Announces Leadership Change in Electronics Segment
Positive
Mar 31, 2025
On March 31, 2025, Helios Technologies announced a leadership change in its Electronics Segment, with Billy Aldridge appointed as Senior Vice President, Managing Director, replacing Lee Wichlacz. This realignment is expected to enhance customer engagement and streamline operations, positioning the Electronics Segment to better achieve its strategic initiatives and 2025 objectives.
Executive/Board ChangesBusiness Operations and Strategy
Helios Technologies Appoints Laura Brown as New Chair
Positive
Mar 17, 2025
On March 13, 2025, Philippe Lemaitre announced his retirement as Chair of Helios Technologies’ Board of Directors, having served since 2007 and as Chair since 2013. Laura Dempsey Brown, a board member since 2020, has been elected as the new Chair, effective immediately. This leadership transition is part of Helios’ succession planning, aiming to continue its growth and diversification strategy. The company acknowledges Lemaitre’s contributions over the years and looks forward to leveraging Brown’s experience to enhance shareholder returns and operational performance.
Executive/Board ChangesBusiness Operations and Strategy
Helios Technologies Appoints Sean Bagan as CEO
Positive
Jan 6, 2025
Helios Technologies has announced the promotion of Sean Bagan to President and Chief Executive Officer, effective January 6, 2025. Mr. Bagan, who has been serving as Interim CEO and CFO, will continue as CFO until a permanent replacement is found. This leadership change underscores the company’s commitment to strategic growth and shareholder value, as Mr. Bagan is recognized for his leadership and strategic mindset. The board expressed confidence in Bagan’s ability to guide the company forward and leverage existing talent for future opportunities.
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.