Hillman Solutions Corp. (NASDAQ: HLMN)

Sector: Industrials Industry: Tools & Accessories CIK: 0001822492
Market Cap 1.87 Bn
P/B 1.52
P/E 49.85
P/S 1.22
ROIC (Qtr) 4.11
Div Yield % 0.00
Rev 1y % (Qtr) 8.05
Total Debt (Qtr) 784.18 Mn
Debt/Equity (Qtr) 0.64

About

Price action

Investment thesis

Bull case

  • Tangible assets of 1.01B provide robust 12.96x coverage of other current liabilities 77.59M, indicating strong asset backing.
  • Tangible assets of 1.01B provide robust 3.68x coverage of current liabilities 273.19M, showing strong asset backing.
  • Tangible assets of 1.01B provide robust 6.94x coverage of receivables 144.93M, showing strong asset quality.

Bear case

  • Operating cash flow of 117.44M barely covers its investment activities of (76.73M), with a coverage ratio of -1.53, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 37.73M against inventory of 460.09M, the 0.08 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 37.73M provide limited coverage of acquisition spending of (138000), which is -273.41x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 110.33M show weak coverage of depreciation charges of 138.88M, with a 0.79 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 138.88M relative to operating cash flow of 117.44M, which is 1.18x suggests significant maintenance capital requirements affecting free cash flow.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Tools & Accessories
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SNA Snap-on Inc 20.02 Bn 28.87 4.92 1.27 Bn
2 LECO Lincoln Electric Holdings Inc 17.42 Bn 75.52 7.45 1.24 Bn
3 RBC RBC Bearings INC 15.55 Bn 60.25 9.02 1.13 Bn
4 SWK Stanley Black & Decker, Inc. 13.98 Bn 21.92 1.48 6.61 Bn
5 TTC Toro Co 9.58 Bn 35.83 2.93 1.04 Bn
6 TKR Timken Co 6.56 Bn 22.05 1.44 2.21 Bn
7 KMT Kennametal Inc 2.74 Bn -65.21 1.36 0.64 Bn
8 HLMN Hillman Solutions Corp. 1.87 Bn 49.85 1.22 0.78 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.09 1.90
EV to Cash from Ops. EV/CFO 22.24 27.82
EV to Debt EV to Debt 3.33 8.16
EV to EBIT EV/EBIT 23.67 25.35
EV to EBITDA EV/EBITDA 10.47 17.92
EV to Free Cash Flow [EV/FCF] EV/FCF 63.60 44.85
EV to Market Cap EV to Market Cap 1.40 1.15
EV to Revenue EV/Rev 1.70 3.33
Price to Book Value [P/B] P/B 1.52 5.09
Price to Earnings [P/E] P/E 49.85 24.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 24.32
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 34.31
Dividend per Basic Share Div per Share (Qtr) 0.00 1.81
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 31.22
Interest Coverage Int. cover (Qtr) 1.90 7.73
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 1.86 21.04
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -36.93 0.94
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -8.38
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 101.61 56.68
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 14.70 -4.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 44.98 76.64
EBT Growth (1y) % EBT 1y % (Qtr) 220.23 235.45
EPS Growth (1y) % EPS 1y % (Qtr) 400.00 92.02
FCF Growth (1y) % FCF 1y % (Qtr) -68.15 -578.67
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.48 0.18
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.64 0.84
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.18
Cash Ratio Cash Ratio (Qtr) 0.14 0.44
Current Ratio Curr Ratio (Qtr) 2.46 2.94
Debt to Equity Ratio Debt/Equity (Qtr) 0.64 0.52
Interest Cover Ratio Int Coverage (Qtr) 1.90 7.73
Times Interest Earned Times Interest Earned (Qtr) 1.90 7.73
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 16.20 14.51
EBIT Margin % EBIT Margin % (Qtr) 7.18 10.07
EBT Margin % EBT Margin % (Qtr) 3.41 8.24
Gross Margin % Gross Margin % (Qtr) 48.80 33.67
Net Profit Margin % Net Margin % (Qtr) 2.40 6.02