Hurco Companies, Inc. (HURC) | Investment Case

1. Company Snapshot

1.a. Company Description

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.

In addition, the company offers machine tool components, automation integration equipment, and solutions for job shops; and software options, control upgrades, and accessories and replacement parts for its products, as well as customer service, training, and applications support services.It serves independent job shops and specialized short-run production applications within large manufacturing operations, as well as precision tool, die, and mold manufacturers in aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer industries.The company sells its products under the Hurco, Milltronics, and Takumi brands through independent agents and distributors, as well as through its direct sales and service organizations.

Hurco Companies, Inc.was incorporated in 1968 and is headquartered in Indianapolis, Indiana.

Show Full description

1.b. Last Insights on HURC

Hurco Companies, Inc.'s recent performance was negatively impacted by a quarterly loss and revenue decline in Q4 fiscal 2024, driven by weak demand and declining margins. The company faced a challenging 2024 due to reduced capital spending among its smaller manufacturing customer base, exacerbated by higher interest rates and election uncertainties. Additionally, Hurco's exposure to smaller manufacturers and European markets led to a significant peak-to-trough decline.

1.c. Company Highlights

Last Price	14.93
Change Percentage	-0.99%
Open	15.2
Previous Close	15.08
Market Cap ( Millions)	97
Volume	50875
Year High	23.45
Year Low	13.19
M A 50	17.09
M A 200	16.88

FCF Yield	11.36%
Dividend Yield	0.00%
ROE	-6.67%
Debt / Equity	6.04%
Net Debt / EBIDTA	459.83%
Price To Book	0.47
Price Earnings Ratio	-7.14
Price To FCF	8.8
Price To sales	0.52
EV / EBITDA	-9.19

2. Transcript Summary

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3. NewsRoom

Hurco Announces Executive Chair Transition

Nov -18

Source: globenewswire.com

Hurco: Hard To Ignore At Half Of Book Value

Oct -22

Source: seekingalpha.com

Hurco Stock Gains Following Q3 Earnings Showing Narrower Losses

Sep -10

Source: zacks.com

Hurco Reports Third Quarter Results For Fiscal Year 2025

Sep -05

Source: globenewswire.com

Uncertainty And Cautious Capital Spending Continue To Drag On Hurco

Jul -29

Source: seekingalpha.com

Hurco Stock Declines Following Lower Q2 Earnings and Revenues

Jun -11

Source:

Hurco Reports Second Quarter Results for Fiscal Year 2025

Jun -06

Source: globenewswire.com

HURC Stock Falls Post Q1 Earnings Decline, Orders Dip Y/Y

Mar -11

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.55%)

6. Segments

Computerized Machine Tools

Expected Growth: 4.5%

The growth of computerized machine tools is driven by increasing demand for precision and flexibility in manufacturing processes, adoption of Industry 4.0 technologies, and rising need for automation in various industries such as aerospace, automotive, and medical devices.

Service Parts

Expected Growth: 4.5%

Growing demand for CNC machines in industries such as aerospace, automotive, and medical devices drives the need for replacement parts and accessories, ensuring optimal performance and minimizing downtime.

Service Fees

Expected Growth: 4.5%

The growth of Hurco Companies' service fees is driven by increasing demand for CNC machine tools and software products, coupled with the need for regular maintenance and technical support to ensure optimal performance and minimize downtime.

Computer Control Systems and Software

Expected Growth: 8.5%

Growing demand for CNC machine tools, increasing adoption of Industry 4.0 technologies, and rising need for efficient manufacturing processes drive the growth of Computer Control Systems and Software from Hurco Companies, Inc.

7. Detailed Products

CNC Machining Centers

High-performance machining centers for milling, drilling, and tapping operations

CNC Lathes

High-precision turning centers for producing cylindrical parts and components

CNC Grinding Machines

High-accuracy grinding machines for surface and profile grinding operations

CNC Milling Machines

High-speed milling machines for milling, drilling, and tapping operations

CNC Turning Centers

High-precision turning centers for producing cylindrical parts and components

Control Systems

Advanced control systems for CNC machines, including conversational programming and simulation software

Software Solutions

CAD/CAM software and manufacturing execution system (MES) solutions for CNC machining

8. Hurco Companies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Hurco Companies, Inc. faces moderate threat from substitutes due to the availability of alternative CNC machine tools and machining centers from competitors.

Bargaining Power Of Customers

Hurco Companies, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Hurco Companies, Inc. relies on a few key suppliers for critical components, giving them some bargaining power, but the company's size and reputation help mitigate this risk.

Threat Of New Entrants

The CNC machine tool industry has high barriers to entry, including significant capital requirements and the need for specialized expertise, making it difficult for new entrants to compete with Hurco Companies, Inc.

Intensity Of Rivalry

The CNC machine tool industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry for Hurco Companies, Inc.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	4.85%
Debt Cost	3.95%
Equity Weight	95.15%
Equity Cost	6.20%
WACC	6.09%
Leverage	5.09%

11. Quality Control: Hurco Companies, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Luxfer

A-Score: 6.1/10

Value: 6.7

Growth: 5.4

Quality: 5.8

Yield: 7.0

Momentum: 6.0

Volatility: 5.7

1-Year Total Return ->

Enerpac Tool

A-Score: 5.1/10

Value: 4.5

Growth: 7.8

Quality: 6.5

Yield: 0.0

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

Thermon

A-Score: 4.6/10

Value: 5.2

Growth: 5.8

Quality: 6.7

Yield: 0.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

Park-Ohio

A-Score: 4.3/10

Value: 8.5

Growth: 3.9

Quality: 2.7

Yield: 5.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

Twin Disc

A-Score: 4.2/10

Value: 6.1

Growth: 4.8

Quality: 3.6

Yield: 1.0

Momentum: 7.0

Volatility: 2.7

1-Year Total Return ->

Hurco

A-Score: 3.6/10

Value: 8.8

Growth: 1.4

Quality: 3.4

Yield: 1.0

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

0.41%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.09%

Hurco Companies, Inc. - US4473241044

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HURC

1.c. Company Highlights

Higher Yield

Weak Momentum

Lower Growth

Fairly Valued

Cheaper

Lower Quality

Average Growth

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.55%)

6. Segments

Computerized Machine Tools

Expected Growth: 4.5%

Service Parts

Expected Growth: 4.5%

Service Fees

Expected Growth: 4.5%

Computer Control Systems and Software

Expected Growth: 8.5%

7. Detailed Products

CNC Machining Centers

CNC Lathes

CNC Grinding Machines

CNC Milling Machines

CNC Turning Centers

Control Systems

Software Solutions

8. Hurco Companies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Hurco Companies, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.93$

Current Price

14.93$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA