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Hillman Solutions (HLMN)
NASDAQ:HLMN
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Hillman Solutions
(NASDAQ:HLMN)
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Rating:61Neutral
Price Target:
$10.50
▲(28.05% Upside)
Action:ReiteratedDate:02/18/26
The score reflects an improving fundamental backdrop (profitability turnaround and better leverage) and constructive technical trend signals, balanced by weaker recent cash conversion and a demanding valuation (high P/E). The latest earnings call supports the outlook with 2026 growth and free-cash-flow recovery guidance, but margin normalization and execution on the cash rebound temper the upside.
Positive Factors
Profitability Turnaround
Hillman shifted from net losses to positive net income and delivered double-digit adjusted EBITDA growth in 2025. That reflects operational improvements, pricing effectiveness and execution across retail programs, creating a firmer earnings base that supports reinvestment and deleveraging over the medium term.
Improved Leverage & Liquidity
Net debt and leverage metrics have meaningfully improved versus recent years and liquidity of roughly $306M provides flexibility. Lower leverage and available revolver capacity support opportunistic bolt-on M&A, targeted buybacks and the ability to absorb working-capital variability without immediate capital raises.
Durable Retail Services & RDS Rollout
Hillman combines broad retail distribution with value-added merchandising, replenishment and in-store RDS kiosks. The MinuteKey 3.5 rollout expands recurring-service revenue and retailer stickiness, strengthening differentiation versus commodity hardware suppliers and supporting durable attach rates and cross-sell opportunities.
Negative Factors
Margin Normalization Risk
2025 margins benefited from timing and tariff/price effects; management guides lower gross margins in 2026. This normalization implies compression in earnings power relative to the prior-year optics and means revenue growth may not translate proportionally into EBITDA or free cash flow without further structural margin gains.
Weak Cash Conversion & Tariff Exposure
A material tariff-related cash hit and inventory timing drove a large FCF swing in 2025, leaving free cash flow coverage weak. The company’s 2026 FCF recovery target depends on tariff normalization and execution; failure to realize that rebound would constrain debt paydown, M&A and capital returns.
Flat Revenue & End‑market Sensitivity
Top-line growth has been tepid over multiple years and Hillman is exposed to housing and DIY demand cycles. A ~5% market volume decline in 2025 highlights sensitivity; absent sustained share gains or successful M&A, structural end‑market weakness could cap organic revenue growth for several quarters.
Hillman Solutions (HLMN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.61B
Dividend YieldN/A
Average Volume (3M)946.94K
Price to Earnings (P/E)40.5
Beta (1Y)0.99
Revenue Growth4.47%
EPS Growth345.07%
CountryUS
Employees3,886
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)0.10
Shares Outstanding196,590,910
10 Day Avg. Volume1,147,365
30 Day Avg. Volume946,936
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)1.46
Price to Sales (P/S)1.16
P/FCF Ratio51.16
Enterprise Value/Market Cap1.50
Enterprise Value/Revenue1.56
Enterprise Value/Gross Profit3.36
Enterprise Value/Ebitda9.46
Forecast
1Y Price Target
$12.55Price Target Upside53.05% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.58
Revenue Forecast (FY)$1.64B
Hillman Solutions Business Overview & Revenue Model
Company DescriptionHillman Solutions Corp., together with its subsidiaries, provides hardware-related products and related merchandising services in North America. It offers hardware products, including anchor shackles and eye bolts, door hinges and chains, garage doors, safety hasps, gate hooks and latches, magnets, hooks and storage, corner braces and mending plates, and springs; and fasteners, such as anchors, ball bearings, bolts, kits, nails, nuts, pins, rivets, screws, spacers, threaded inserts, tools/brushes, washers, wire hardware, and other accessories. The company also offers driveway markers/reflectors, numbers, letters, plaques, signs, stencils, survey and flagging tapes, and safety and caution products; threaded rods, aluminum tubes, and slotted and aluminum angles; wall hangings, including frame hardware, hooks, picture hanging, adhesives, mirrors, wires, and accessories, as well as picture hanging and tool-free mounting products; face masks, gloves, and glasses; keys and engravings; and electrical, plumbing, and automotive products and accessories. It offers its products under the DECK PLUS, GORILLA GRIP, HILLMAN, HARDWARE Essentials, minute key, POWERPRO, OOK, Fas.n.Tite, Distinctions, AWP, OZCO, The Steel Works, and Digz brand names. The company sells its products to hardware stores, home centers, mass merchants, pet supply stores, and other retail outlets, as well as industrial original equipment manufacturers. Hillman Solutions Corp. was founded in 1964 and is headquartered in Cincinnati, Ohio.
How the Company Makes MoneyHillman Solutions generates revenue through multiple streams, primarily by selling its products to retailers and distributors in the hardware and home improvement sectors. The company's core revenue comes from the sale of fasteners, keys, and related products, which are essential for both consumer and industrial applications. Additionally, Hillman Solutions offers value-added services such as inventory management and merchandising solutions, which further contribute to its revenue. Strategic partnerships with major retailers enhance product visibility and distribution, driving sales. Furthermore, the company's focus on innovation and product development allows it to maintain a competitive edge, attracting new customers and retaining existing ones, which ultimately bolsters its earnings.
Hillman Solutions Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue across Hillman’s operating units and channels, showing where sales and growth are concentrated. Reveals customer or channel concentration, which segments are driving growth, and whether the company’s strategy and acquisitions are shifting revenue toward higher-margin or more stable businesses.
Breaks down revenue across Hillman’s operating units and channels, showing where sales and growth are concentrated. Reveals customer or channel concentration, which segments are driving growth, and whether the company’s strategy and acquisitions are shifting revenue toward higher-margin or more stable businesses.
Data provided by:
The Fly
The FlyHillman Solutions Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call presents a balanced but mildly positive outlook. Hillman delivered record net sales and adjusted EBITDA in 2025, with strong HPS performance, a progressing RDS MinuteKey 3.5 rollout, improved leverage, and a 2026 revenue guidance midpoint (+6.3%) and substantial free cash flow rebound targeted. Offsetting these positives are meaningful near-term headwinds: a pronounced tariff-related cash hit (~$65M) that depressed 2025 free cash flow, market volume weakness (~-5%) and housing softness, a planned normalization of margins in 2026 (adjusted gross margin guidance 46%–47% vs 48.7% in 2025), and short-term segment timing and customer-transition effects that pressure early‑2026 results. Management’s tone is confident and constructive, but execution around margin normalization, cash-flow recovery and M&A will determine whether the positive trajectory persists.Q4-2025 Updates
Positive Updates
Record Net Sales and Adjusted EBITDA
Full-year 2025 net sales increased 5.4% to $1,552,000,000. Adjusted EBITDA rose 13.9% year-over-year to $275,300,000, driving an improved FY adjusted EBITDA margin of 17.7% (from 16.4% in 2024). Q4 adjusted EBITDA increased 2.3% to $57,500,000.
Strong Hardware & Protective Solutions (HPS) Performance
HPS (largest segment) delivered net sales growth of 7.8% to $1,200,000,000 and adjusted EBITDA growth of 26% to $196,300,000, driven by pricing, new business wins (e.g., PowerPro screws, rope & chain) and strong sales/service execution.
RDS Growth and MinuteKey 3.5 Rollout
Robotics & Digital Solutions (RDS) returned to growth with net sales up 1.6% to $220,200,000. Over 1,800 MinuteKey 3.5 kiosks were installed in 2025 and nearly 3,500 3.5 machines are now in the field; enhanced machine capabilities are producing comparable net sales gains versus older machines.
2026 Guidance: Revenue Growth and Material Free Cash Flow Recovery Expected
2026 guidance calls for net sales of $1.6B–$1.7B (midpoint $1.65B, +6.3% vs 2025) and adjusted EBITDA of $275M–$285M (midpoint $280M, +1.7% vs 2025). Free cash flow is guided to $100M–$120M (midpoint $110M), implying a >90% conversion of adjusted net income to free cash flow.
Improved Leverage and Strong Liquidity
Net debt at year-end 2025 was $665.8M, improved from $674.0M at the end of 2024. Net debt to trailing twelve-month adjusted EBITDA improved to 2.4x from 2.8x. Total liquidity available was $306M ( $279M revolver availability + $27M cash).
Operational Execution and Pricing Effectiveness
Price increases contributed ~5.5 percentage points of top-line growth in 2025; management highlighted strong fill rates, on-time-in-full shipping and supply-chain execution that supported record sales and outsized margins (benefit from price timing during tariff flows).
Active Capital Allocation and M&A Readiness
2025 CapEx was $70M (down from $85M in 2024 as MinuteKey build moderates). The company repurchased 1.4M shares for $12.4M (avg $9.07). Management reports a healthy M&A pipeline and expects to pursue bolt-on deals (targeting ~1–2 deals in 2026).
Negative Updates
Tariff Impact Weighed on Cash Flow
Approximately $65M of tariff-related impact reduced operating cash flow in 2025. Operating activities generated $105M in 2025 versus $183M in 2024. Free cash flow fell to $35.1M in 2025 from $98.1M in 2024 (a ~64% decline), driven largely by the tariff cash impact and inventory timing.
Market Volumes and Housing Headwinds
Market volumes declined roughly 5% in 2025, and existing home sales remained weak at 4.06M (well below the ~5.0M ten‑year average), creating a headwind to home-improvement demand and top-line growth absent company actions.
Margins Expected to Normalize Lower in 2026
Management expects adjusted gross margins to step down to 46%–47% in 2026 from 48.7% in 2025 as tariff-related cost/price timing normalizes. Q1 2026 is expected to see the highest-cost inventory flow through, creating near-term margin pressure below the guided range.
Adjusted EBITDA Growth Lags Revenue Guidance
While 2026 guidance implies mid single-digit revenue growth (midpoint +6.3%), adjusted EBITDA midpoint guidance implies only +1.7% growth, signaling margin compression versus 2025's outsized earnings that benefited from timing effects.
Canada Softness and FX Headwind
Canada net sales declined 0.6% year-over-year, with foreign-exchange imposing over a two-point headwind. Adjusted EBITDA margin in Canada came in just shy of 10% for 2025, indicating continued pressure in that market.
Segment Timing Issues and RDS Customer Transition
Protective Solutions experienced channel inventory balancing in Q4 that pressured near-term sales. RDS also faces a customer transition headwind that will continue through Q1–Q2 2026 before anniversarying, creating modeling uncertainty early in the year.
Free Cash Flow Recovery Dependent on Normalization
The large swing from $35.1M FCF in 2025 to guided $100M–$120M in 2026 depends on tariff normalization, inventory build timing, and a return of operating cash flow — introducing execution risk to the cash recovery narrative.
Company Guidance
Hillman guided 2026 net sales of $1.60B–$1.70B (midpoint $1.65B, +6.3% vs. 2025), adjusted EBITDA of $275M–$285M (midpoint $280M, +1.7% vs. 2025), free cash flow of $100M–$120M (midpoint $110M, representing a >90% conversion of adjusted net income), and adjusted gross margins of ~46%–47%; they expect CapEx of $70M–$75M, to continue opportunistic share repurchases, and to finish the year ~2.1x net debt / trailing-12-month adjusted EBITDA (ex‑M&A). Management said 2026 growth will come from the rollover of 2025 pricing (mid‑single‑digit price contribution) plus new business wins (expected to outpace 2025), that market volumes are assumed flat at the high end of the guide (with downside if volumes step down), and that margins will normalize as tariff costs fully flow through—with Q1 gross margins likely slightly below the 46%–47% range (due to high‑cost inventory), stepping up in Q2 and reaching the high end in the back half.Hillman Solutions Financial Statement Overview
Summary
Profitability has improved with a shift from net losses to positive net income and better operating results, alongside improved leverage trends. Offsetting this are thin net margins, essentially flat multi-year revenue, and weaker 2025 cash conversion as operating cash flow and free cash flow stepped down versus 2024.Income Statement
Revenue has been essentially flat over the last few years, with a modest rebound in 2025 (about +1%) after slight declines in 2023–2024. Profitability has improved meaningfully: the company moved from net losses in 2021–2023 to positive net income in 2024–2025, and operating profit expanded alongside higher EBITDA. Offsetting this, net margins remain thin (roughly 2.6% in 2025), and several margin fields are missing/0.0 in 2025 which limits visibility into the full quality of the improvement.62
Positive
Balance Sheet
Leverage has improved versus 2020 when debt was very high relative to equity, and the debt-to-equity ratio has trended down steadily from 2021–2025 (ending around 0.62 in 2025). Equity has also grown, supporting balance sheet stability. However, absolute debt remains sizable (about $765M in 2025), and returns on equity are still low (about 3.3% in 2025), implying limited earnings power relative to the capital base.64
Positive
Cash Flow
Cash generation is positive in most years, with operating cash flow and free cash flow recovering strongly after a weak 2021. That said, 2025 shows a notable step-down versus 2024: operating cash flow fell (to about $105M) and free cash flow declined to about $35M, with negative free-cash-flow growth. Free cash flow also covered only about one-third of net income in 2025, pointing to weaker cash conversion in the most recent period.53
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.55B | 1.47B | 1.48B | 1.49B | 1.43B |
| Gross Profit | 615.25M | 707.90M | 647.52M | 639.78M | 566.41M |
| EBITDA | 258.64M | 215.83M | 182.57M | 159.90M | 139.63M |
| Net Income | 40.30M | 17.25M | -9.59M | -16.44M | -38.33M |
Balance Sheet | |||||
| Total Assets | 2.36B | 2.33B | 2.33B | 2.47B | 2.56B |
| Cash, Cash Equivalents and Short-Term Investments | 27.28M | 44.51M | 38.55M | 31.08M | 14.61M |
| Total Debt | 828.03M | 793.02M | 836.06M | 968.85M | 1.01B |
| Total Liabilities | 1.13B | 1.15B | 1.18B | 1.31B | 1.41B |
| Stockholders Equity | 1.23B | 1.18B | 1.15B | 1.16B | 1.15B |
Cash Flow | |||||
| Free Cash Flow | 35.09M | 98.12M | 172.27M | 49.42M | -161.81M |
| Operating Cash Flow | 105.19M | 183.34M | 238.03M | 119.01M | -110.25M |
| Investing Cash Flow | -70.35M | -143.40M | -67.85M | -72.82M | -90.45M |
| Financing Cash Flow | -52.22M | -39.27M | -161.98M | -28.72M | 193.33M |
Hillman Solutions Technical Analysis
Negative
8.20
Price Trends
9.40
Negative
9.21
Negative
8.84
Negative
Market Momentum
-0.35
Positive
31.51
Neutral
2.89
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLMN, the sentiment is Negative. The current price of 8.2 is below the 20-day moving average (MA) of 9.47, below the 50-day MA of 9.40, and below the 200-day MA of 8.84, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 31.51 is Neutral, neither overbought nor oversold. The STOCH value of 2.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HLMN.
Hillman Solutions Risk Analysis
Hillman Solutions disclosed 31 risk factors in its most recent earnings report. Hillman Solutions 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
Hillman Solutions Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $18.21B | 67.73 | 8.66% | ― | 8.27% | 19.06% | |
72 Outperform | $7.54B | 26.39 | 9.60% | 1.61% | -1.01% | -12.13% | |
70 Outperform | $9.67B | 31.21 | 21.04% | 1.95% | -1.53% | -21.19% | |
65 Neutral | $3.07B | 28.19 | 8.70% | 2.74% | -2.63% | -4.46% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $13.41B | 32.68 | 4.52% | 4.42% | -1.40% | ― | |
61 Neutral | $1.61B | 40.47 | 3.11% | ― | 4.47% | 345.07% |
* Industrials Sector Average
HLMN
Hillman Solutions
8.20
-1.24
-13.14%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.