Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for profitable short-term investing, highlighting the need for sound fundamentals and positive earnings estimates to maintain momentum. Group 1: Investment Strategy - The trend is a crucial factor in short-term investing, and confirming its sustainability is essential for profitability [1][2] - A predefined "Recent Price Strength" screen can help identify stocks on an uptrend with strong fundamentals, indicating bullishness [3] Group 2: Company Analysis - Helios Technologies (HLIO) - Helios Technologies (HLIO) has shown a solid price increase of 5% over the past 12 weeks, indicating investor confidence in its potential upside [4] - The stock has also increased by 6.1% over the last four weeks, suggesting that the upward trend is still intact [5] - HLIO is trading at 92.7% of its 52-week high-low range, indicating a potential breakout [6] Group 3: Fundamental Strength - HLIO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7] Group 4: Additional Insights - The article suggests that HLIO's price trend is unlikely to reverse soon, and there are other stocks that also meet the "Recent Price Strength" criteria for potential investment [8] - The Zacks Rank system has a strong historical performance, with Rank 1 stocks generating an average annual return of +25% since 1988 [7]

Group 1 - Helios Technologies (HLIO) has outperformed its peers in the Industrial Products sector with a year-to-date performance of approximately 18.6%, compared to an average gain of 3.7% for the sector [4] - The Zacks Rank for Helios Technologies is currently 1 (Strong Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 2.5% increase in the consensus estimate for full-year earnings over the past quarter [3] - The Manufacturing - General Industrial industry, to which Helios Technologies belongs, has seen an average gain of 7.1% this year, further highlighting HLIO's strong performance within its specific industry [5] Group 2 - Kennametal (KMT) is another stock in the Industrial Products sector that has outperformed, with a year-to-date return of 12.9% and a consensus EPS estimate increase of 31.5% over the past three months [4][5] - The Manufacturing - Tools & Related Products industry, which includes Kennametal, is ranked 28 and has experienced a decline of 2.2% this year, contrasting with the performance of Helios Technologies [6]

Core Viewpoint - Helios Technologies has appointed Jeremy Evans as the new Chief Financial Officer, succeeding Michael Connaway, effective immediately. This change is part of the company's strategy to enhance leadership and operational efficiency as it returns to year-over-year growth [2][3][4]. Company Leadership - Jeremy Evans has been with Helios for nearly two years and has demonstrated strong leadership and collaboration skills. He has played a significant role in strategic planning and has provided interim leadership across critical financial functions [3][4]. - Prior to his promotion, Evans served as Chief Accounting Officer and has over 25 years of experience in operational and financial management, including a role at Tech Data [3]. Company Strategy and Performance - Helios Technologies is focused on executing its strategy to improve operational efficiencies, strengthen working capital discipline, and optimize its portfolio to maximize returns on investments [4]. - The company is experiencing a return to year-over-year growth, reporting a 13% increase in sales in the third quarter of 2025 as demand continues to improve [4][11]. Company Overview - Helios Technologies is a global leader in motion control and electronic controls technology, serving diverse markets such as construction, agriculture, and energy. The company has a presence in over 90 countries and has consistently paid dividends since going public in 1997 [5].

Core Insights - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] Group 1 - The article suggests that users may face blocks if they have an ad-blocker enabled [1]

Core Viewpoint - Helios Technologies (HLIO) has shown a 7% increase in stock price over the past four weeks, with a mean price target of $67.33 indicating a potential upside of 26.8% from the current price of $53.12 [1] Price Targets and Analyst Estimates - The mean estimate consists of three short-term price targets with a standard deviation of $4.93, where the lowest estimate is $64.00 (20.5% increase) and the highest is $73.00 (37.4% increase) [2] - A low standard deviation among price targets suggests a strong agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about HLIO's earnings prospects, as indicated by a positive trend in earnings estimate revisions [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 2.5%, with one estimate moving higher and no negative revisions [12] - HLIO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on consensus price targets for investment decisions may not be wise, as analysts' ability to set unbiased targets has been questioned [3][7] - Price targets should be treated with skepticism, as they can often mislead investors [10]

Core Insights - Helios Technologies experienced a year-over-year sales increase in Q3, but the market reacted negatively due to concerns about future momentum and margin sustainability [1] - The Electronics segment, particularly Enovation Controls, showed strong performance, with management attributing results to renewed go-to-market strategies and higher customer engagement [1] - CEO Sean Bagan described the quarter as a "turning point," while acknowledging the impact of a goodwill write-down related to the i3PD acquisition and ongoing portfolio adjustments [1] Financial Performance - Revenue for Q3 was $220.3 million, exceeding analyst estimates of $212.5 million, representing a 13.3% year-on-year growth and a 3.7% beat [6] - Adjusted EPS was $0.72, beating analyst estimates of $0.66 by 9.8% [6] - Adjusted EBITDA was $45.1 million, with a margin of 20.5%, surpassing analyst estimates of $42.36 million by 6.5% [6] - Revenue guidance for Q4 is $197 million at the midpoint, which is below analyst estimates of $201.2 million [6] - Full-year Adjusted EPS guidance was raised to $2.47 at the midpoint, reflecting a 2.7% increase [6] - Operating margin decreased to 0.6% from 11.4% in the same quarter last year [6] - Organic revenue rose 12% year-on-year, exceeding analyst estimates of 7.5% growth by 454.1 basis points [6] - Market capitalization stands at $1.80 billion [6] Analyst Insights - Christopher Moore from CJS Securities inquired about recent commercial wins, with CEO Bagan highlighting new contracts in hydraulics and electronics, including a significant AGCO win [6] - Bagan noted that achieving mid-20% margins requires higher sales volumes and cost discipline, emphasizing the need for a healthier mix and operational leverage [6] - Jeffrey Hammond from KeyBanc Capital Markets asked about the recreational vehicle market, with Bagan stating that retail demand is steady and channel inventory levels have normalized [6] - Joseph Grabowski from Baird raised questions about unusual items in the Electronics segment, to which Bagan acknowledged that approximately $3 million of Q4 sales were pulled into Q3, but underlying demand remains strong [6] - Jon Braatz from Kansas City Capital questioned the i3PD goodwill impairment, with CFO Jeremy Evans explaining that engineering resources have been redeployed to core projects [6]

Core Viewpoint - The article emphasizes the importance of identifying sustainable trends in short-term investing, highlighting that while price momentum can be profitable, it requires strong fundamentals to maintain that momentum [1][2]. Group 1: Stock Performance - Helios Technologies (HLIO) has shown a solid price increase of 5.3% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - Over the last four weeks, HLIO's price has increased by 15.1%, suggesting that the upward trend is still intact [5]. - HLIO is currently trading at 91.9% of its 52-week high-low range, indicating a potential breakout [6]. Group 2: Fundamental Strength - HLIO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. - The Zacks Rank system has a strong historical performance, with Rank 1 stocks generating an average annual return of +25% since 1988 [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks with sufficient fundamental strength to sustain their recent uptrends [3]. - In addition to HLIO, there are other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [8]. - The article encourages investors to utilize various Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [8].

Financial Data and Key Metrics Changes - The company reported a 13% increase in sales year-over-year, reaching $220 million, exceeding the guidance range of $215 million [14][22] - Adjusted EBITDA margin was above 20%, marking a significant recovery [5][11] - Gross profit increased by 21% year-over-year to $73 million, with gross margin expanding by 200 basis points to 33.1% [15][19] - Diluted EPS was $0.31, down 9% year-over-year, while diluted non-GAAP EPS was $0.72, up 22% [16][19] Business Segment Data and Key Metrics Changes - The electronics segment grew by 21% year-over-year, driven by strong performance in the recreational and industrial markets [14][18] - Hydraulics sales increased by 9% year-over-year, supported by improving demand in mobile and agriculture markets [17][19] - The electronics segment's gross profit and gross margin expanded by 38% and 420 basis points, respectively [18] Market Data and Key Metrics Changes - Year-over-year sales increased double digits across all three regions, with APAC growing by 10% and the Americas by 6% [14][15] - EMEA experienced a typical seasonal decline of 6% [14] - The mobile, recreational, and agriculture markets showed signs of recovery compared to year-over-year comparables [14][15] Company Strategy and Development Direction - The company is focused on organic growth driven by innovation and has launched new products that provide incremental sales streams [24][25] - A restructuring initiative is in place to streamline operations and optimize the portfolio [10][21] - The company aims to reduce its leverage ratio to around two times by year-end, allowing for strategic investments in 2026 [11][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2026 with growth, citing improved demand trends and healthier dealer inventory levels [21][68] - The company anticipates fourth-quarter sales in the range of $192-$202 million, representing a 10% increase year-over-year [22] - Management highlighted the importance of volume growth to achieve mid-20s EBITDA margins in the future [34][36] Other Important Information - The company closed the sale of Custom Fluidpower, recording a gain of $21 million, while also writing down $25.9 million of goodwill related to i3 Product Development [9][10] - The company is committed to maintaining its long dividend history and opportunistically repurchasing shares [11][24] Q&A Session Summary Question: Can you provide insight into recent commercial wins and visibility into 2026? - Management highlighted recent wins in various sectors, including agriculture and recreational markets, indicating a positive outlook for 2026 [30][31] Question: What will it take to return to adjusted EBITDA levels seen in fiscal 2021? - Management noted that increased volume and effective cost management are crucial for achieving mid-20s EBITDA margins [34][36] Question: What is the current state of the recreational vehicle market? - Management indicated that while retail demand has not rebounded, dealer inventory levels are healthier, which is a positive sign for future growth [44][46] Question: Is there any further portfolio reshaping planned? - Management stated that there are no imminent changes but emphasized ongoing evaluations of the portfolio [48][50] Question: What are the plans for the i3 Product Development operation? - Management clarified that the focus is on integrating talented engineers into the broader Helios portfolio rather than pursuing standalone projects [74][76]

Financial Data and Key Metrics Changes - Sales in Q3 2025 were $220 million, a 13% increase year-over-year, exceeding guidance of $215 million [19] - Adjusted EBITDA margin was above 20%, marking a return to growth after previous declines [7][8] - Gross profit increased 21% year-over-year to $73 million, with gross margin expanding 200 basis points to 33.1% [21] - Diluted EPS was $0.31, down 9% year-over-year, while diluted non-GAAP EPS was $0.72, up 22% [23] Business Segment Data and Key Metrics Changes - Electronics segment sales grew 21% year-over-year, driven by strong performance in innovation controls [19][25] - Hydraulics segment sales increased 9% year-over-year, supported by improving demand in mobile and agriculture markets [19][24] - Gross profit and gross margin for Hydraulics grew 12% and 90 basis points, respectively [24] Market Data and Key Metrics Changes - Year-over-year sales increased double digits across all three regions, with APAC growing 10% and The Americas 6% [20] - EMEA experienced a typical seasonal decline of 6% [20] - Foreign exchange positively impacted sales by $1.8 million compared to the previous year [20] Company Strategy and Development Direction - The company is focused on organic growth driven by innovation and has launched new products to capture adjacent markets [33] - Strategic initiatives include restructuring, optimizing operations, and investing in engineering resources [15][30] - The company aims to lower its leverage ratio to around two times by year-end 2025 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in recreational and agricultural markets, indicating a potential upcycle [30][56] - The company expects Q4 2025 sales to be in the range of $192 million to $200 million, representing a 10% increase year-over-year [31] - There is confidence in entering 2026 with growth, supported by improved demand trends and healthier dealer inventory levels [86] Other Important Information - The company closed the sale of Custom Fluid Power, recording a gain of $21 million, while also writing down $25.9 million of goodwill related to i3 product development [14] - The new CFO, Michael Conway, is expected to contribute to the company's growth and financial improvements [17] Q&A Session Summary Question: Can you provide insight into recent commercial wins and visibility into 2026? - Management highlighted a focus on go-to-market strategies and recent wins in various segments, indicating positive sales and order levels [39][40] Question: What will it take to return to adjusted EBITDA levels seen in fiscal 2021? - Management noted that achieving mid-20s EBITDA margins will require increased volume and highlighted the importance of their go-to-market initiatives [45][46] Question: Is there any more portfolio reshaping needed? - Management stated that there are no imminent changes but will continue to evaluate the portfolio for performance [60][61] Question: Can you discuss the growth in the agricultural market? - Growth in agriculture is attributed to improved dealer inventory levels and positive trends in incoming orders, indicating a potential recovery [76][78] Question: What changes are being made to turn around the i3 operation? - The focus is on leveraging talented engineers from the i3 acquisition to benefit the broader Helios portfolio rather than pursuing standalone projects [92][95]

Financial Performance - Net sales reached $220 million, a 13% year-over-year increase[12] - Diluted Non-GAAP EPS was $072, up 22% year-over-year[12] - Adjusted EBITDA margin was 205%, a decrease of 40 bps year-over-year[12] - Gross profit increased 21% year-over-year, with gross margin expanding 200 bps[23] Segment Performance - Hydraulics segment sales were $1413 million, up 9% year-over-year[38] - Electronics segment sales were $790 million, up 21% year-over-year[41] Cash Flow and Debt - Free cash flow was $185 million[43] - Net debt to TTM adjusted EBITDA ratio was 24x[54] Outlook - Full year 2025 total net sales are projected to be between $820 million and $830 million, representing a 2% to 3% increase relative to 2024[56] - Full year 2025 diluted Non-GAAP EPS is projected to be between $243 and $250, representing a 16% to 19% increase relative to 2024[56] - Fourth quarter 2025 sales outlook for Hydraulics is $121 million to $128 million, a 1% to 7% increase versus Q4 2024[59] - Fourth quarter 2025 sales outlook for Electronics is $71 million to $74 million, a 19% to 24% increase versus Q4 2024[59]