HNI (HNI) AI Stock Analysis

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HNI

(NYSE:HNI)

51Neutral

HNI Corporation's overall stock score of 51 reflects significant financial challenges, with zero revenue in the latest year impacting profitability and liquidity. Technical indicators show bearish trends, while valuation metrics offer some support. The earnings call provides a positive outlook with expected earnings improvements, but challenges remain.

HNI (HNI) vs. S&P 500 (SPY)

Market Cap

$1.93B

Dividend Yield3.2%

Average Volume (3M)394.31K

Price to Earnings (P/E)14.3

Beta (1Y)0.92

Revenue Growth3.80%

EPS Growth182.70%

CountryUS

Employees7,600

SectorIndustrials

Sector Strength64

IndustryBusiness Equipment & Supplies

Share Statistics

EPS (TTM)2.88

Shares Outstanding46,895,900

10 Day Avg. Volume294,192

30 Day Avg. Volume394,307

Financial Highlights & Ratios

PEG Ratio0.08

Price to Book (P/B)N/A

Price to Sales (P/S)0.81

Price to Cash Flow (P/CF)10.00

P/FCF Ratio10.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$61.50

Price Target Upside45.22% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

HNI Business Overview & Revenue Model

Company DescriptionHNI Corporation, together with its subsidiaries, manufactures and sells workplace furnishings and residential building products primarily in the United States. The company operates through two segments, Workplace Furnishings and Residential Building Products. The Workplace Furnishings segment offers a range of commercial and home office furniture, including panel-based and freestanding furniture systems, seating, storage, tables, and architectural products under the HON, Allsteel, Beyond, Gunlocke, Maxon, HBF, OFM, Respawn, Lamex, and HNI India brands. This segment sells its products through independent dealers, wholesalers, office product distributors, e-commerce retailers, and wholesalers, as well as directly to end-user customers; and federal, state, and local governments. The Residential Building Products segment provides various gas, wood, electric, and pellet-fueled fireplaces; inserts; stoves; facings; and accessories primarily for home use under the Heatilator, Heat & Glo, Majestic, Monessen, Quadra-Fire, Harman, Vermont Castings, PelPro, SimpliFire, The Outdoor GreatRoom Company, and Stellar brand names. This segment markets its products through independent dealers and distributors, and corporation-owned distribution and retail outlets. The company was incorporated in 1944 and is headquartered in Muscatine, Iowa.

How the Company Makes MoneyHNI Corporation generates revenue through the sale of its office furniture and hearth products. The office furniture segment contributes significantly to the company's earnings by selling products to businesses, government entities, and educational institutions. This segment capitalizes on its extensive distribution network and brand portfolio to reach a diverse customer base. The hearth products segment adds to the company's revenue by selling fireplaces and related accessories to residential and commercial clients. HNI's earnings are supported by its manufacturing capabilities, strategic acquisitions, and partnerships with dealers and distributors, which help expand its market reach and customer base.

HNI Financial Statement Overview

Summary

HNI faces significant financial challenges with zero revenue reported in the latest year, which severely impacts profitability and operational sustainability. Previous years showed stable growth and profitability, but recent results indicate a critical need for strategic adjustments to restore financial stability.

Income Statement

Neutral

The income statement shows a concerning trend for HNI, with total revenue dropping to 0 in the latest year, significantly impacting gross profit and net income calculations. Previous periods indicate fluctuating revenue growth, with the most recent complete data showing a modest revenue growth of 3.06% from 2022 to 2023. EBIT and EBITDA margins were strong in 2023, but the current lack of revenue is alarming.

Balance Sheet

Neutral

The balance sheet reflects an increase in total debt to $499.1 million in the latest year, while stockholders' equity increased to $840.1 million, resulting in a debt-to-equity ratio that suggests moderate leverage. Historical trends show a stable equity base, but the latest figures raise concerns about sustainability without revenue generation.

Cash Flow

Negative

Cash flow analysis reveals a negative free cash flow of -$69.7 million in the latest year, with operating cash flow also negative. This indicates potential liquidity issues, as the company is not generating sufficient cash from operations. Prior periods showed positive free cash flow, highlighting recent operational challenges.

Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
2.53B	2.43B	2.36B	2.18B	1.96B
	Gross Profit
1.03B	948.30M	834.90M	757.36M	721.12M
	EBIT
206.50M	90.30M	111.50M	85.42M	100.19M
	EBITDA
314.30M	185.20M	195.70M	167.60M	177.88M
	Net Income Common Stockholders
139.50M	49.20M	123.90M	59.80M	41.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
28.90M	34.50M	19.40M	53.66M	117.81M
	Total Assets
1.88B	1.93B	1.41B	1.50B	1.42B
	Total Debt
499.10M	578.00M	300.70M	274.52M	254.69M
	Net Debt
474.30M	549.10M	283.30M	222.25M	138.57M
	Total Liabilities
1.03B	1.17B	797.70M	907.93M	827.29M
	Stockholders Equity
840.10M	761.40M	616.50M	589.64M	590.42M
Cash Flow		Free Cash Flow
173.80M	188.50M	12.80M	65.08M	172.67M
	Operating Cash Flow
226.70M	267.50M	81.20M	131.63M	214.47M
	Investing Cash Flow
-51.00M	-444.80M	-10.70M	-111.01M	-100.37M
	Financing Cash Flow
-182.20M	188.80M	-105.40M	-84.50M	-50.05M

HNI Technical Analysis

Technical Analysis Sentiment

Negative

Last Price42.35

Price Trends

50DMA

44.38

Negative

100DMA

47.69

Negative

200DMA

49.57

Negative

Market Momentum

MACD

-0.89

Negative

RSI

47.79

Neutral

STOCH

50.25

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HNI, the sentiment is Negative. The current price of 42.35 is below the 20-day moving average (MA) of 42.49, below the 50-day MA of 44.38, and below the 200-day MA of 49.57, indicating a bearish trend. The MACD of -0.89 indicates Negative momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 50.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HNI.

HNI Risk Analysis

HNI disclosed 29 risk factors in its most recent earnings report. HNI 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

HNI Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVY	75 Outperform	$13.71B	19.98	31.95%	2.07%	3.57%	―
POWL	75 Outperform	$2.22B	14.00	37.22%	0.61%	38.27%	105.52%
SCS	71 Outperform	$1.11B	9.48	12.70%	4.16%	0.20%	50.50%
Sector *	63 Neutral	$4.26B	11.28	5.43%	215.24%	4.12%	-8.73%
TGI	54 Neutral	$1.93B	277.43	46.74%	―	-8.59%	―
HNI	51 Neutral	$1.93B	14.32	17.42%	3.20%	3.80%	182.70%
ACCO	47 Neutral	$349.58M	―	-14.59%	7.98%	-9.09%	-356.14%

* Industrials Sector Average

Performance Comparison

HNI

42.35

0.98

2.37%

ACCO

ACCO Brands

3.88

-0.68

-14.91%

AVY

Avery Dennison

173.62

-41.71

-19.37%

POWL

Powell Industries

184.34

36.32

24.54%

SCS

Steelcase

9.95

-1.73

-14.81%

TGI

Triumph Group

25.25

11.59

84.85%

HNI Earnings Call Summary

Earnings Call Date: Feb 20, 2025 | % Change Since: -12.99% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Neutral

The earnings call highlights record EPS growth and strong operating performance in Workplace Furnishings, as well as a positive outlook for continued earnings improvement in 2025. However, challenges include revenue declines in residential building products and the impact of tariffs on short-term profitability. The sentiment is balanced with both positive growth prospects and notable challenges.

Highlights

Record Non-GAAP EPS Growth

Non-GAAP EPS for Fiscal Year 2024 grew 15% to $3.06, marking a new record high for the full year.

Workplace Furnishings Profit Improvement

Workplace Furnishings non-GAAP operating profit increased by 44%, and the segment's operating margin reached 9.5%, the highest since 2007.

Positive Outlook for 2025

The company anticipates a fourth consecutive year of double-digit non-GAAP earnings improvement in 2025.

Strong Cash Flow and Debt Management

Operating cash flow exceeded $225 million, and year-end gross debt leverage was at 1.1 times, maintaining a strong financial position.

Increase in Workplace Furnishings Backlog

Overall workplace backlog was up double digits year-over-year at the end of 2024.

Lowlights

Revenue Decline in Residential Building Products

Revenue for the residential building products segment declined by 5% year-over-year in the fourth quarter due to housing market weakness.

Softness in SMB Workplace Furnishings

Transactional business within small and medium-sized customers experienced softness throughout the fourth quarter, impacting revenue trends.

Tariff and Inflation Concerns

Tariff uncertainty and rising inflation expectations are expected to contribute to ongoing volatility in 2025.

First Quarter Revenue and Profit Outlook

First quarter 2025 revenue in Workplace Furnishings is expected to decrease, and there will be a temporary first-quarter price-cost drag due to tariffs.

Company Guidance

During the HNI Corporation's fourth-quarter and fiscal year 2024 results conference call, management provided robust guidance for 2025, expecting a fourth consecutive year of double-digit non-GAAP EPS growth. In 2024, non-GAAP EPS increased by 15% to $3.06, marking a record high, driven by a consolidated non-GAAP operating margin of 8.6%. For 2025, the company anticipates a low to mid-single-digit revenue growth in both workplace furnishings and residential building products, with a return to revenue growth beginning in the second quarter. The workplace furnishings segment showed internal metrics improvement, with orders up 2% year-over-year and a backlog up double digits. Meanwhile, residential building products revenue is expected to grow largely in the latter half of 2025, as housing market dynamics remain challenging. The company plans to manage anticipated tariff impacts through a surcharge approach and expects operational improvements, including savings from Mexico and KII synergies, to drive significant EPS growth through 2026.

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.