Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

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Equity Bottom-Up

<ul><li>HNI reported strong 4Q24 margins despite continued revenue headwinds in both Workplace Furnishings (WF) and Residential Building Products (RBP), with adjusted EPS of $0.87 beating our estimate of $0.78 and consensus even as revenue came in lighter than our expectations in both segments.</li><li>See (1) for our summary of the quarter and our variance analysis below.</li><li>EPS should continue to grow through FY26, even on flat revenue, on the basis of (1) continued margin strength, and (2) KII and Mexico synergies delivering $0.70-0.80 EPS growth over the next two years.</li></ul>

HNI reported strong 4Q24 margins despite continued revenue headwinds in both Workplace Furnishings (WF) and Residential Building Products (RBP), with adjusted EPS of $0.87 beating our estimate of $0.78 and consensus even as revenue came in lighter than our expectations in both segments.See (1) for our summary of the quarter and our variance analysis below.EPS should continue to grow through FY26, even on flat revenue, on the basis of (1) continued margin strength, and (2) KII and Mexico synergies delivering $0.70-0.80 EPS growth over the next two years.

HNI Corporation - New Revenue, EPS Estimates...