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H&E EQUIPMENT SERVICES INC (HEES) Stock Fundamental Analysis

NASDAQ:HEES - Nasdaq - US4040301081 - Common Stock - Currency: USD

100.35  +0.2 (+0.2%)

After market: 100.25 -0.1 (-0.1%)

Fundamental Rating

4

HEES gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 49 industry peers in the Trading Companies & Distributors industry. HEES has an excellent profitability rating, but there are concerns on its financial health. HEES is valued expensive and it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

HEES had positive earnings in the past year.
HEES had a positive operating cash flow in the past year.
HEES had positive earnings in 4 of the past 5 years.
HEES had a positive operating cash flow in each of the past 5 years.
HEES Yearly Net Income VS EBIT VS OCF VS FCFHEES Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M 400M

1.2 Ratios

The Return On Assets of HEES (4.97%) is comparable to the rest of the industry.
HEES's Return On Equity of 24.07% is amongst the best of the industry. HEES outperforms 89.58% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.56%, HEES is in line with its industry, outperforming 45.83% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HEES is below the industry average of 9.86%.
Industry RankSector Rank
ROA 4.97%
ROE 24.07%
ROIC 7.56%
ROA(3y)5.7%
ROA(5y)3.97%
ROE(3y)32.81%
ROE(5y)22.61%
ROIC(3y)7.61%
ROIC(5y)6.81%
HEES Yearly ROA, ROE, ROICHEES Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40

1.3 Margins

HEES has a Profit Margin of 9.47%. This is amongst the best in the industry. HEES outperforms 81.25% of its industry peers.
In the last couple of years the Profit Margin of HEES has grown nicely.
With a decent Operating Margin value of 16.38%, HEES is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Operating Margin of HEES has grown nicely.
Looking at the Gross Margin, with a value of 45.70%, HEES is in the better half of the industry, outperforming 77.08% of the companies in the same industry.
HEES's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 16.38%
PM (TTM) 9.47%
GM 45.7%
OM growth 3Y28%
OM growth 5Y7.99%
PM growth 3YN/A
PM growth 5Y13.26%
GM growth 3Y9.52%
GM growth 5Y5.65%
HEES Yearly Profit, Operating, Gross MarginsHEES Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 20 30 40

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1

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HEES is destroying value.
The number of shares outstanding for HEES has been increased compared to 1 year ago.
Compared to 5 years ago, HEES has more shares outstanding
The debt/assets ratio for HEES has been reduced compared to a year ago.
HEES Yearly Shares OutstandingHEES Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 10M 20M 30M
HEES Yearly Total Debt VS Total AssetsHEES Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

2.2 Solvency

HEES has an Altman-Z score of 1.91. This is not the best score and indicates that HEES is in the grey zone with still only limited risk for bankruptcy at the moment.
HEES has a Altman-Z score of 1.91. This is in the lower half of the industry: HEES underperforms 62.50% of its industry peers.
A Debt/Equity ratio of 2.55 is on the high side and indicates that HEES has dependencies on debt financing.
HEES has a worse Debt to Equity ratio (2.55) than 77.08% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.55
Debt/FCF N/A
Altman-Z 1.91
ROIC/WACC0.74
WACC10.16%
HEES Yearly LT Debt VS Equity VS FCFHEES Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M 1B

2.3 Liquidity

HEES has a Current Ratio of 0.70. This is a bad value and indicates that HEES is not financially healthy enough and could expect problems in meeting its short term obligations.
HEES has a Current ratio of 0.70. This is amonst the worse of the industry: HEES underperforms 95.83% of its industry peers.
A Quick Ratio of 0.65 indicates that HEES may have some problems paying its short term obligations.
HEES's Quick ratio of 0.65 is on the low side compared to the rest of the industry. HEES is outperformed by 81.25% of its industry peers.
Industry RankSector Rank
Current Ratio 0.7
Quick Ratio 0.65
HEES Yearly Current Assets VS Current LiabilitesHEES Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M

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3

3. Growth

3.1 Past

HEES shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -16.53%.
Measured over the past years, HEES shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.55% on average per year.
HEES shows a small growth in Revenue. In the last year, the Revenue has grown by 5.69%.
Measured over the past years, HEES shows a small growth in Revenue. The Revenue has been growing by 3.47% on average per year.
EPS 1Y (TTM)-16.53%
EPS 3Y53.56%
EPS 5Y17.55%
EPS Q2Q%-41.78%
Revenue 1Y (TTM)5.69%
Revenue growth 3Y13.42%
Revenue growth 5Y3.47%
Sales Q2Q%-3.95%

3.2 Future

The Earnings Per Share is expected to decrease by -4.51% on average over the next years.
The Revenue is expected to grow by 4.23% on average over the next years.
EPS Next Y-30.44%
EPS Next 2Y-10.43%
EPS Next 3Y-4.51%
EPS Next 5YN/A
Revenue Next Year2.68%
Revenue Next 2Y3.1%
Revenue Next 3Y4.23%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
HEES Yearly Revenue VS EstimatesHEES Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 500M 1B 1.5B
HEES Yearly EPS VS EstimatesHEES Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3 4

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2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 25.47, the valuation of HEES can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as HEES.
Compared to an average S&P500 Price/Earnings ratio of 30.30, HEES is valued at the same level.
HEES is valuated quite expensively with a Price/Forward Earnings ratio of 26.17.
HEES's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. HEES is more expensive than 66.67% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HEES to the average of the S&P500 Index (23.06), we can say HEES is valued inline with the index average.
Industry RankSector Rank
PE 25.47
Fwd PE 26.17
HEES Price Earnings VS Forward Price EarningsHEES Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HEES is valued a bit cheaper than the industry average as 77.08% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 7.74
HEES Per share dataHEES EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30 40

4.3 Compensation for Growth

HEES has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as HEES's earnings are expected to decrease with -4.51% in the coming years.
PEG (NY)N/A
PEG (5Y)1.45
EPS Next 2Y-10.43%
EPS Next 3Y-4.51%

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5

5. Dividend

5.1 Amount

HEES has a Yearly Dividend Yield of 1.10%.
Compared to an average industry Dividend Yield of 1.87, HEES pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.29, HEES's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 1.1%

5.2 History

The dividend of HEES decreases each year by -0.03%.
HEES has paid a dividend for at least 10 years, which is a reliable track record.
HEES has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)-0.03%
Div Incr Years0
Div Non Decr Years10
HEES Yearly Dividends per shareHEES Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8 1

5.3 Sustainability

HEES pays out 27.95% of its income as dividend. This is a sustainable payout ratio.
HEES's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP27.95%
EPS Next 2Y-10.43%
EPS Next 3Y-4.51%
HEES Yearly Income VS Free CF VS DividendHEES Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M -200M -300M
HEES Dividend Payout.HEES Dividend Payout, showing the Payout Ratio.HEES Dividend Payout.PayoutRetained Earnings

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H&E EQUIPMENT SERVICES INC

NASDAQ:HEES (2/20/2025, 8:25:00 PM)

After market: 100.25 -0.1 (-0.1%)

100.35

+0.2 (+0.2%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-20 2025-02-20/amc
Earnings (Next)04-28 2025-04-28/bmo
Inst Owners78.02%
Inst Owner Change4.68%
Ins Owners12.42%
Ins Owner Change0.24%
Market Cap3.67B
Analysts47.5
Price Target86.7 (-13.6%)
Short Float %10.05%
Short Ratio3.51
Dividend
Industry RankSector Rank
Dividend Yield 1.1%
Yearly Dividend1.1
Dividend Growth(5Y)-0.03%
DP27.95%
Div Incr Years0
Div Non Decr Years10
Ex-Date02-18 2025-02-18 (0.275)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-15.09%
Min EPS beat(2)-17.08%
Max EPS beat(2)-13.1%
EPS beat(4)1
Avg EPS beat(4)-5.61%
Min EPS beat(4)-17.08%
Max EPS beat(4)18.49%
EPS beat(8)5
Avg EPS beat(8)4.21%
EPS beat(12)9
Avg EPS beat(12)13.32%
EPS beat(16)12
Avg EPS beat(16)13.05%
Revenue beat(2)0
Avg Revenue beat(2)-3.12%
Min Revenue beat(2)-3.44%
Max Revenue beat(2)-2.8%
Revenue beat(4)1
Avg Revenue beat(4)-1.02%
Min Revenue beat(4)-3.44%
Max Revenue beat(4)3.28%
Revenue beat(8)5
Avg Revenue beat(8)0.73%
Revenue beat(12)8
Avg Revenue beat(12)1.24%
Revenue beat(16)8
Avg Revenue beat(16)-4.62%
PT rev (1m)12.4%
PT rev (3m)15.08%
EPS NQ rev (1m)1.7%
EPS NQ rev (3m)1.7%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)-0.08%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)-0.19%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.07%
Valuation
Industry RankSector Rank
PE 25.47
Fwd PE 26.17
P/S 2.42
P/FCF N/A
P/OCF 7.42
P/B 6.15
P/tB 9.28
EV/EBITDA 7.74
EPS(TTM)3.94
EY3.93%
EPS(NY)3.84
Fwd EY3.82%
FCF(TTM)-1.5
FCFYN/A
OCF(TTM)13.52
OCFY13.48%
SpS41.47
BVpS16.31
TBVpS10.82
PEG (NY)N/A
PEG (5Y)1.45
Profitability
Industry RankSector Rank
ROA 4.97%
ROE 24.07%
ROCE 10.09%
ROIC 7.56%
ROICexc 7.59%
ROICexgc 8.27%
OM 16.38%
PM (TTM) 9.47%
GM 45.7%
FCFM N/A
ROA(3y)5.7%
ROA(5y)3.97%
ROE(3y)32.81%
ROE(5y)22.61%
ROIC(3y)7.61%
ROIC(5y)6.81%
ROICexc(3y)8.2%
ROICexc(5y)7.37%
ROICexgc(3y)8.79%
ROICexgc(5y)7.96%
ROCE(3y)10.15%
ROCE(5y)9.09%
ROICexcg growth 3Y21.19%
ROICexcg growth 5Y2.37%
ROICexc growth 3Y21.68%
ROICexc growth 5Y2.97%
OM growth 3Y28%
OM growth 5Y7.99%
PM growth 3YN/A
PM growth 5Y13.26%
GM growth 3Y9.52%
GM growth 5Y5.65%
F-Score5
Asset Turnover0.52
Health
Industry RankSector Rank
Debt/Equity 2.55
Debt/FCF N/A
Debt/EBITDA 2.27
Cap/Depr 130.51%
Cap/Sales 36.23%
Interest Coverage 3.61
Cash Conversion 73.87%
Profit Quality N/A
Current Ratio 0.7
Quick Ratio 0.65
Altman-Z 1.91
F-Score5
WACC10.16%
ROIC/WACC0.74
Cap/Depr(3y)178.52%
Cap/Depr(5y)142.73%
Cap/Sales(3y)44.94%
Cap/Sales(5y)35.92%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-16.53%
EPS 3Y53.56%
EPS 5Y17.55%
EPS Q2Q%-41.78%
EPS Next Y-30.44%
EPS Next 2Y-10.43%
EPS Next 3Y-4.51%
EPS Next 5YN/A
Revenue 1Y (TTM)5.69%
Revenue growth 3Y13.42%
Revenue growth 5Y3.47%
Sales Q2Q%-3.95%
Revenue Next Year2.68%
Revenue Next 2Y3.1%
Revenue Next 3Y4.23%
Revenue Next 5YN/A
EBIT growth 1Y-5.63%
EBIT growth 3Y45.17%
EBIT growth 5Y11.74%
EBIT Next Year139.25%
EBIT Next 3Y39.49%
EBIT Next 5YN/A
FCF growth 1Y71.7%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y84.27%
OCF growth 3Y12.34%
OCF growth 5Y10.4%