Hillman Solutions: Limited Margin Visibility Affects Growth Optimism

BI Insights
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Summary

  • I recommend a hold rating on Hillman Solutions due to fair valuation and margin headwinds from tariffs and input costs.
  • Revenue growth in FY2025 should be driven by price increases, market share gains, and the Intex acquisition, partially offsetting volume declines.
  • Adjusted EBITDA margin is expected to improve slightly in FY2025, but higher input costs and tariffs should pressure margins in FY2026.
  • The stock trades at a forward P/E of 20.05x, in line with the sector median, making it fairly valued until margin visibility improves.

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Investment Thesis

Hillman Solutions Corp. (NASDAQ:HLMN) is expected to navigate the current macroeconomic uncertainty with price increases, market share wins, and acquisitions of Intex. However, the volume decline is expected to put some pressure on its net sales

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