Hudson Technologies, Undervaluation Unlikely To Last

I am rating Hudson Technologies, HDSN 0.00%↑ , a Strong Buy based on valuation and balance sheet strength. The company stock has been beaten down this year and is available at a discount. It can currently be bought at 8.1 times earnings and 0.3 Price to Earnings Growth, which is significantly below its peers. Additionally, the company is projected to grow its sales by 18% next year with an expected EPS growth of 35.1%.

The stock price has declined 28% over the previous 52 weeks. I attribute this decline to lower commodity prices (refrigerants) and 11% decline in revenues and a lower gross margin in 2023 compared to the year before. The EPA rule change phasing down the use of virgin HFC and promoting the increase in use of reclaimed refrigerant is one reason why the selling price has been under pressure as the companies work to reduce their inventories.