Hurco Companies Inc (NASDAQ: HURC)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0000315374
Market Cap 114.15 Mn
P/B 0.57
P/E -7.55
P/S 0.64
ROIC (Qtr) -4.55
Div Yield % 0.00
Rev 1y % (Qtr) -15.33
Total Debt (Qtr) 11.93 Mn
Debt/Equity (Qtr) 0.06
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About

Hurco Companies, Inc., a leading industrial technology company, operates under the stock symbol HURC. The company is a global provider of computerized machine tools, computer control systems, and software products, primarily catering to the metal cutting industry. For over five decades, Hurco has been instrumental in automating manufacturing processes, introducing interactive computer control systems that enhance productivity and profitability for customers. The company's core business activities revolve around the design, manufacture, and sale...

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Investment thesis

Bull case

  • Strong operating cash flow of 17.56M provides robust 1.47x coverage of total debt 11.93M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 48.71M provide 11.14x coverage of short-term debt 4.37M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 255.58M provides 21.42x coverage of total debt 11.93M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 17.56M provides exceptional 197.31x coverage of interest expenses 89000, showing strong debt service capability.
  • Operating cash flow of 17.56M provides strong 10.34x coverage of stock compensation 1.70M, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 17.56M barely covers its investment activities of (1.25M), with a coverage ratio of -14.09, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating earnings of (12.08M) show weak coverage of depreciation charges of 2.69M, with a -4.49 ratio indicating high capital intensity and potential reinvestment needs.
  • Retained earnings of 146.31M provide limited buffer against comprehensive income items of (9.01M), which is -16.24x, indicating elevated exposure to market risks.
  • Tangible assets of 255.58M provide limited backing for working capital of 173.06M, which is 1.48x, suggesting increased operational risk in market downturns.
  • Operating cash flow of 17.56M is outpaced by equity issuance of (2M) (-8.78 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.31 2.28
EV to Cash from Ops. EV/CFO 4.67 37.14
EV to Debt EV to Debt 6.87 34.39
EV to EBIT EV/EBIT -6.79 27.71
EV to EBITDA EV/EBITDA -10.82 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 5.54 133.36
EV to Market Cap EV to Market Cap 0.72 1.04
EV to Revenue EV/Rev 0.46 39.88
Price to Book Value [P/B] P/B 0.57 6.22
Price to Earnings [P/E] P/E -7.55 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.73
Dividend per Basic Share Div per Share (Qtr) 0.00 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 82.53
Interest Coverage Int. cover (Qtr) -135.73 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 2.94 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 46.15 118.48
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 4.01 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -59.38 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) -30.28 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) -23.54 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) 8.59 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) 375.00 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -12.62 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.10
Cash Ratio Cash Ratio (Qtr) 0.94 3.01
Current Ratio Curr Ratio (Qtr) 4.33 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.38
Interest Cover Ratio Int Coverage (Qtr) -135.73 12.34
Times Interest Earned Times Interest Earned (Qtr) -135.73 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -5.30 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) -6.77 -7,413.30
EBT Margin % EBT Margin % (Qtr) -6.82 -9,015.79
Gross Margin % Gross Margin % (Qtr) 18.50 -32.61
Net Profit Margin % Net Margin % (Qtr) -8.50 -7,962.06