What a brutal six months it’s been for Hyster-Yale Materials Handling. The stock has dropped 23% and now trades at $39.15, rattling many shareholders. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Is there a buying opportunity in Hyster-Yale Materials Handling, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is Hyster-Yale Materials Handling Not Exciting?
Despite the more favorable entry price, we're swiping left on Hyster-Yale Materials Handling for now. Here are three reasons why there are better opportunities than HY and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Hyster-Yale Materials Handling grew its sales at a tepid 5.1% compounded annual growth rate. This fell short of our benchmark for the industrials sector. 
2. Revenue Projections Show Stormy Skies Ahead
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Hyster-Yale Materials Handling’s revenue to drop by 5.1%, a decrease from its 5.1% annualized growth for the past five years. This projection is underwhelming and indicates its products and services will face some demand challenges.
3. Breakeven Free Cash Flow Limits Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Hyster-Yale Materials Handling broke even from a free cash flow perspective over the last five years, giving the company limited opportunities to return capital to shareholders.
Final Judgment
Hyster-Yale Materials Handling isn’t a terrible business, but it doesn’t pass our bar. After the recent drawdown, the stock trades at 4.4× forward EV-to-EBITDA (or $39.15 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. Let us point you toward an all-weather company that owns household favorite Taco Bell.
Stocks We Would Buy Instead of Hyster-Yale Materials Handling
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
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