Hawkins (HWKN) AI Stock Analysis

• Market Cap: $2.26B
• Dividend Yield: 0.65%
• Average Volume (3M): 135.34K
• Price to Earnings (P/E): 26.3
• Beta (1Y): 1.13
• Revenue Growth: 3.01%
• EPS Growth: 12.36%
• Country: US
• Employees: 934
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Chemicals
• EPS (TTM): 3.92
• Shares Outstanding: 20,929,005
• 10 Day Avg. Volume: 114,859
• 30 Day Avg. Volume: 135,342
• PEG Ratio: 2.13
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.27
• Price to Cash Flow (P/CF): 25.60
• P/FCF Ratio: 24.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $122.00
• Price Target Upside: 12.96% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

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 Business Overview & Revenue Model

Company Description

Hawkins, 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 Money

Hawkins, 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

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

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

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
TTM	Mar 2024	Jun 2023	Jun 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
952.13M	919.16M	935.10M	774.54M	596.87M	540.20M
	Gross Profit
218.81M	193.64M	165.12M	146.52M	123.76M	100.92M
	EBIT
114.68M	104.04M	88.15M	71.19M	55.88M	41.67M
	EBITDA
142.77M	137.23M	117.23M	95.51M	79.99M	63.05M
	Net Income Common Stockholders
81.85M	75.36M	60.04M	51.54M	40.98M	28.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.30M	7.15M	7.57M	3.50M	3.00M	4.28M
	Total Assets
707.24M	657.93M	590.53M	567.33M	472.55M	389.33M
	Total Debt
20.53M	108.26M	120.33M	134.70M	110.57M	68.83M
	Net Debt
12.22M	101.11M	112.77M	131.20M	107.57M	64.55M
	Total Liabilities
250.26M	251.91M	240.52M	264.73M	207.30M	155.84M
	Stockholders Equity
456.98M	406.03M	350.02M	302.60M	265.25M	233.48M
Cash Flow		Free Cash Flow
80.23M	119.35M	29.08M	14.32M	23.00M	34.35M
	Operating Cash Flow
122.14M	159.50M	77.40M	42.84M	43.79M	58.90M
	Investing Cash Flow
-88.95M	-122.50M	-41.23M	-49.76M	-71.43M	-24.20M
	Financing Cash Flow
-30.63M	-37.41M	-32.10M	7.42M	26.36M	-39.62M

Hawkins Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 108.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPM	77 Outperform	$14.94B	22.81	25.61%	1.68%	0.12%	24.30%
EMN	75 Outperform	$10.49B	11.80	16.11%	3.60%	1.91%	2.94%
HWKN	71 Outperform	$2.26B	26.31	19.24%	0.65%	3.01%	12.36%
APD	65 Neutral	$64.95B	17.01	24.40%	2.42%	-3.12%	64.53%
FUL	60 Neutral	$2.90B	22.99	7.27%	1.68%	1.65%	-10.99%
ASH	57 Neutral	$2.69B	21.03	0.18%	2.90%	-4.35%	-115.63%
Sector *	47 Neutral	$2.64B	-3.98	-26.97%	3.35%	2.55%	-29.66%