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Hawkins (HWKN)
NASDAQ:HWKN

Hawkins (HWKN) AI Stock Analysis

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Hawkins

(NASDAQ:HWKN)

71Outperform
Hawkins exhibits a strong financial foundation with consistent revenue and profit growth, supported by efficient operations and a robust balance sheet. However, the mixed technical indicators and high P/E ratio suggest caution, as the stock may be overvalued. The low dividend yield is less appealing for income investors. Overall, Hawkins is positioned well for growth but faces valuation challenges.
Positive Factors
Business Strategy
Hawkins has grown its water treatment business through acquisition leading to the segment becoming larger than the industrial business.
Earnings
Hawkins reported sales of $226.2 million compared to an estimate of $217.5 million, managing to sell more volume within its industrial business as prices declined.
Negative Factors
Valuation
Valuation has not evolved to give a boost in confidence that the downside risk would be limited.

Hawkins (HWKN) vs. S&P 500 (SPY)

Hawkins Business Overview & Revenue Model

Company DescriptionHawkins, Inc. engaged in the distribution, blending, and manufacture of chemicals and specialty ingredients for a wide variety of industries. It operates through the following segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment provides g industrial chemicals, products, and services to the agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. The Water Treatment segment offers chemicals, equipment, and solutions for potable water, municipal, industrial wastewater, industrial process water, and non-residential swimming pool water. The Health and Nutrition segment comprises of the ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, health, and wellness products. The company was founded by Howard Hawkins in 1938 and is headquartered in Roseville, MN.
How the Company Makes MoneyHawkins, Inc. generates revenue through its three main business segments. The Industrial segment supplies bulk chemicals for various industrial purposes, including manufacturing, agriculture, and energy production, which contributes significantly to the company's revenue. The Water Treatment segment provides chemicals and equipment to treat potable water, municipal and industrial wastewater, and industrial process water, catering to both governmental and commercial clients. The Health and Nutrition segment offers specialty ingredients and chemicals to the food, beverage, personal care, and pharmaceutical industries. Hawkins benefits from long-term relationships with major suppliers and customers, leveraging its extensive distribution network and value-added services to maintain a strong market position and drive sales growth.

Hawkins Financial Statement Overview

Summary
Hawkins demonstrates strong financial performance with robust revenue and profit growth, excellent operating efficiency, and a healthy balance sheet. The company’s low leverage and solid equity position reduce financial risks, while cash flow remains strong despite a recent dip in free cash flow growth.
Income Statement
88
Very Positive
Hawkins shows strong financial performance with excellent revenue growth and increasing profitability. The TTM Gross Profit Margin stands at 22.98%, and the Net Profit Margin is 8.60%, indicating efficient cost management and strong earnings. Revenue grew by 3.59% from the previous annual period, showcasing consistent growth. EBIT and EBITDA margins are healthy at 12.04% and 14.99%, respectively, reflecting robust operating efficiency.
Balance Sheet
82
Very Positive
The balance sheet is robust, with a low Debt-to-Equity Ratio of 0.045, highlighting a conservative capital structure. Return on Equity (ROE) is impressive at 17.91%, indicating strong profitability relative to shareholder equity. The Equity Ratio of 64.61% underscores a solid financial base with significant equity financing, minimizing leverage-related risks.
Cash Flow
75
Positive
Hawkins has a strong cash flow position, with an Operating Cash Flow to Net Income Ratio of 1.49, demonstrating solid cash generation relative to earnings. However, the Free Cash Flow Growth Rate shows a decline of 32.79% from the prior year, which may indicate increased capital expenditures. The Free Cash Flow to Net Income Ratio is 0.98, reflecting robust cash flow conversion from earnings.
Breakdown
TTMMar 2024Jun 2023Jun 2022Mar 2021Mar 2020
Income StatementTotal Revenue
952.13M919.16M935.10M774.54M596.87M540.20M
Gross Profit
218.81M193.64M165.12M146.52M123.76M100.92M
EBIT
114.68M104.04M88.15M71.19M55.88M41.67M
EBITDA
142.77M137.23M117.23M95.51M79.99M63.05M
Net Income Common Stockholders
81.85M75.36M60.04M51.54M40.98M28.37M
Balance SheetCash, Cash Equivalents and Short-Term Investments
8.30M7.15M7.57M3.50M3.00M4.28M
Total Assets
707.24M657.93M590.53M567.33M472.55M389.33M
Total Debt
20.53M108.26M120.33M134.70M110.57M68.83M
Net Debt
12.22M101.11M112.77M131.20M107.57M64.55M
Total Liabilities
250.26M251.91M240.52M264.73M207.30M155.84M
Stockholders Equity
456.98M406.03M350.02M302.60M265.25M233.48M
Cash FlowFree Cash Flow
80.23M119.35M29.08M14.32M23.00M34.35M
Operating Cash Flow
122.14M159.50M77.40M42.84M43.79M58.90M
Investing Cash Flow
-88.95M-122.50M-41.23M-49.76M-71.43M-24.20M
Financing Cash Flow
-30.63M-37.41M-32.10M7.42M26.36M-39.62M

Hawkins Technical Analysis

Technical Analysis Sentiment
Positive
Last Price108.00
Price Trends
50DMA
110.77
Negative
100DMA
117.95
Negative
200DMA
113.51
Negative
Market Momentum
MACD
-1.93
Negative
RSI
51.30
Neutral
STOCH
68.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HWKN, the sentiment is Positive. The current price of 108 is above the 20-day moving average (MA) of 105.62, below the 50-day MA of 110.77, and below the 200-day MA of 113.51, indicating a neutral trend. The MACD of -1.93 indicates Negative momentum. The RSI at 51.30 is Neutral, neither overbought nor oversold. The STOCH value of 68.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HWKN.

Hawkins Risk Analysis

Hawkins disclosed 21 risk factors in its most recent earnings report. Hawkins reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Hawkins Peers Comparison

Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
RPRPM
77
Outperform
$14.94B22.8125.61%1.68%0.12%24.30%
EMEMN
75
Outperform
$10.49B11.8016.11%3.60%1.91%2.94%
71
Outperform
$2.26B26.3119.24%0.65%3.01%12.36%
APAPD
65
Neutral
$64.95B17.0124.40%2.42%-3.12%64.53%
FUFUL
60
Neutral
$2.90B22.997.27%1.68%1.65%-10.99%
ASASH
57
Neutral
$2.69B21.030.18%2.90%-4.35%-115.63%
47
Neutral
$2.64B-3.98-26.97%3.35%2.55%-29.66%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HWKN
Hawkins
108.00
33.24
44.46%
APD
Air Products and Chemicals
291.92
52.68
22.02%
ASH
Ashland
57.06
-36.40
-38.95%
EMN
Eastman Chemical
91.08
1.84
2.06%
FUL
H.B. Fuller Company
53.43
-24.41
-31.36%
RPM
RPM International
116.17
2.46
2.16%
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.