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HURC

Hurco Companies NasdaqGS:HURC Stock Report

Last Price

US$22.48

Market Cap

US$147.6m

7D

-3.2%

1Y

-29.0%

Updated

01 Oct, 2022

Data

Company Financials
HURC fundamental analysis
Snowflake Score
Valuation2/6
Future Growth0/6
Past Performance4/6
Financial Health6/6
Dividends3/6

HURC Stock Overview

Hurco Companies, Inc., an industrial technology company, designs, manufactures, and sells computerized machine tools to companies in the metal cutting industry worldwide.

Hurco Companies, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Hurco Companies
Historical stock prices
Current Share PriceUS$22.48
52 Week HighUS$35.15
52 Week LowUS$21.75
Beta0.51
1 Month Change-0.97%
3 Month Change-11.15%
1 Year Change-29.00%
3 Year Change-30.10%
5 Year Change-48.02%
Change since IPO19.89%

Recent News & Updates

Sep 15

Hurco declares $0.15 dividend

Hurco (NASDAQ:HURC) declares $0.15/share quarterly dividend, in line with previous. Forward yield 2.53% Payable Oct. 17; for shareholders of record Oct. 3; ex-div Sept. 30. See HURC Dividend Scorecard, Yield Chart, & Dividend Growth.

Sep 02

Hurco GAAP EPS of $0.18, revenue of $57.64M

Hurco press release (NASDAQ:HURC): Q3 GAAP EPS of $0.18. Revenue of $57.64M (+6.4% Y/Y).

Jul 14

Hurco Already Hit Hard In Anticipation Of Weaker Capex Spending

Hurco shares have underperformed a weak industrial sector, as investors have worried about a reversal in short-cycle demand and capex investments. Orders have started shrinking, driving the book-to-bill below 1.0x. Hurco shares look undervalued, but uncertainty about whether short-cycle industrials will see a brief correction or a more extended downcycle will weigh on sentiment. What I thought back in March may have just been a “pothole” for Hurco (HURC) has started looking more like a sinkhole, as orders have turned down and investors have grown considerably more worried about the health of short-cycle industrial names, particularly those exposed to capital equipment budgets. Time will tell if we get a true cyclical downturn in the next few quarters or whether this is a shorter “correction” in response to inflationary and labor pressures (not to mention the chaos created by the pandemic). In any event, it’s clear that short-cycle industrials are by and large not in favor right now, and while I do think Hurco’s valuation is too low now, the reality is that the market can often overcorrect and investors looking to take advantage of the pullback have to at least be aware of the risks of further declines before the outlook and sentiment stabilize. Looking Back On Fiscal Second Quarter Earnings Hurco’s early June report of fiscal second quarter earnings didn’t offer much in the way of good news, with further erosion in sales momentum and flagging orders, though margins were mixed. While none of this was entirely out of my expectations, it does seem to be coming on faster and sharper than I’d expected even a quarter ago. Revenue rose 8% from the prior year, or 12% in constant currency terms, but fell 6% sequentially. Sales in North America rose 14% yoy and fell 7% qoq, while sales in Europe rose 15% in constant currency and fell 9% sequentially. Sales to customers in Asia-Pacific countries rose 4% yoy (constant currency) and rose 8% qoq. Management mentioned price as a meaningful contributor to sales growth, but didn’t elaborate further. Industrial distributors MSC Industrial (MSM) and Fastenal (FAST) reported about six to seven points of price contribution to their sales growth in their most recent quarters, and while these are absolutely different businesses, I think it gives at least some anecdotal context for what sort of contribution Hurco may have seen from pricing in the quarter. Gross margin declined 70bp yoy and 50bp qoq in the quarter as reported, but the year-ago results include benefits from pandemic relief. Netted out, gross margin rose 60bp on improved volumes, but there was sequential erosion. Likewise with operating income, which declined 120bp yoy as reported, but improved 160bp on an adjusted basis (while falling 290bp qoq). Spending ahead of a major tradeshow later this year could explain at least some of the sequential change. Eroding Orders A Valid Worry The most concerning part of the report was the 10% yoy decline (8% in constant currency) in total orders, which also declined 17% sequentially, driving the book-to-bill to 0.94x from 1.06x in the prior quarter. Orders rose 26% yoy and 11% qoq in North America, but fell 16% yoy (constant currency) and 31% qoq in Europe and 43% yoy (constant currency) and 19% qoq in Asia-Pacific. The book-to-bill in North America actually rebounded, improving from 0.92x in the prior quarter to 1.09x, while the Europe book-to-bill declined from 1.19x to 0.90x. Interpreting these numbers is no simple task. For starters, Hurco isn’t like DMG Mori or other large machine tool manufacturers –large well-known multinationals aren’t their core clientele, and their core offerings aren’t really aimed at large volume production. With a smaller, more specialty-oriented customer base, it’s harder to draw straight lines from macro trends to Hurco’s performance (and vice versa). To that end, I’d note that DMG Mori’s first-quarter results (which overlapped some with Hurco’s quarter) were quite strong, with revenue up 33% and orders up 46% and strong management sentiment for the full-year outlook. I’d also note that the Japanese Machine Tool Builders Association (or JMTBA) has continued to report strong yoy sales trends (up 24% in June, up 25% in May, and up 30% in April), though with two straight month-over-month declines. There are a lot of things that could be happening. Smaller customers may be holding off on capital investments, focusing instead on managing through current backlogs and supply shortages. Customers may be nervous about continuing to invest in capacity ahead of a downturn in orders (with ISM new orders going back below 50). Customers in Europe may also be nervous about investing given the war in Ukraine. Or Hurco could simply be losing share to other machine tool manufacturers. I don’t think it’s just a Hurco problem, though, as the performance of these shares has been similar to Kennametal (KMT), another short-cycle industrial bellwether, on growing worries about short-cycle trends. The Outlook A quarter ago I started pulling in my assumptions for a downturn, and I’ve accelerated that process. I’m still modeling revenue growth for Hurco in 2022, and I think FQ3’22 will be up yoy, but I’m looking for mid-single-digit full-year growth and I see some risk to that estimate. I’ve lowered my expectations for 2023 as well, but pulling in the downturn also pulls in the rebound – my five-year and long-term revenue estimates have changed very little.

Shareholder Returns

HURCUS MachineryUS Market
7D-3.2%-1.0%-2.5%
1Y-29.0%-18.3%-23.2%

Return vs Industry: HURC underperformed the US Machinery industry which returned -18.3% over the past year.

Return vs Market: HURC underperformed the US Market which returned -23.2% over the past year.

Price Volatility

Is HURC's price volatile compared to industry and market?
HURC volatility
HURC Average Weekly Movement4.4%
Machinery Industry Average Movement5.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: HURC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HURC's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1968706Greg Volovichttps://www.hurco.com

Hurco Companies, Inc., an industrial technology company, designs, manufactures, and sells computerized machine tools to companies in the metal cutting industry worldwide. The company’s principal products include general-purpose computerized machine tools, including vertical and horizontal machining centers, turning centers, and toolroom machines. It also provides computer control systems and related software for press brake applications.

Hurco Companies, Inc. Fundamentals Summary

How do Hurco Companies's earnings and revenue compare to its market cap?
HURC fundamental statistics
Market CapUS$147.63m
Earnings (TTM)US$8.79m
Revenue (TTM)US$256.33m

16.8x

P/E Ratio

0.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HURC income statement (TTM)
RevenueUS$256.33m
Cost of RevenueUS$192.49m
Gross ProfitUS$63.84m
Other ExpensesUS$55.05m
EarningsUS$8.79m

Last Reported Earnings

Jul 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.34
Gross Margin24.91%
Net Profit Margin3.43%
Debt/Equity Ratio0%

How did HURC perform over the long term?

See historical performance and comparison

Dividends

2.7%

Current Dividend Yield

43%

Payout Ratio