HELIOS TECHNOLOGIES, INC. (HLIO): what the price requires
At today's price, HELIOS TECHNOLOGIES, INC. (HLIO) is priced for today's economics sustained for ~10.3 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/HLIO
Headline
| Field | Value |
|---|---|
| Ticker | HLIO |
| Company | HELIOS TECHNOLOGIES, INC. |
| Current price | $80.08/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 6.0% |
| Operating margin today | 8.2% |
| Margin compression implied | -2.2pp |
| Must persist for | 10.3y |
| Multiple paid | 42x operating income |
The operating-margin requirement is derived from the framework's value band at year 10, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 10.2% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2 years.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | -0.06σ |
| sustained it ~10 years at this level | 14% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.92x | 5 | expensive |
| Earnings | 3.33x | 5 | expensive |
| Relative | 1.52x | 5 | expensive |
| Growth | 1.08x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $73.90 | 1.08x | yes | FCF base $0.1B, growth 11% (input: historical growth), terminal g 4.0%, WACC 8.6%, 6yr projection |
| DCF Exit Multiple | Growth | $81.74 | 0.98x | yes | Exit EV/EBITDA: 19.1x / 21.1x / 23.1x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $52.73 | 1.52x | yes | P/E 25.76x (blended: static sector reference 18x + trailing (TTM) 44x), scenarios: 21.4x / 25.8x / 30.1x (bear / base = reference held flat / bull), EV/EBITDA 14.72x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $19.74 | 4.06x | yes | BV/sh $28.12, ROE (TTM) 6.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $16.28 | 4.92x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $63.13 | 1.27x | yes | Rev $0.9B, growth 11% (input: historical growth; tapered), Terminal P/S: 2.5x / 3.1x / 3.6x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $21.84 | 3.67x | yes | EPS $1.82, growth 1% (input: historical EPS growth), PEG=38.43 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $15.95 | 5.02x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.10B × (1−23%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $15.81 | 5.07x | yes | BV $28.12 + 5yr PV of (ROE (TTM) 6.5% − Kₑ 9.3%) × BV; BV grows 4.2%/yr |
| Graham Number | Asset | $33.93 | 2.36x | yes | √(22.5 × EPS $1.82 × BVPS $28.12) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $41.65 | 1.92x | yes | EBITDA $0.14B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $25.87 | 3.10x | yes | FCF $107.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $24.02 | 3.33x | yes | SBC-adj FCF $0.10B (FCF $0.11B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $58.73 | 1.36x | yes | EPS $1.82 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $6.07 | 13.19x | yes | BV $28.12 × (ROIC 1.9% / WACC 8.6%) |
| P/Sales Sector | Relative | $65.46 | 1.22x | yes | Revenue $0.87B × sector P/S 2.5x |
| PEG Fair Value | Relative | $68.25 | 1.17x | yes | EPS $1.82 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $19.68 | 4.07x | yes | EPS $1.82 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $285.1m |
| Net debt / NOPAT (after-tax) | 5.29x |
| Net debt / operating income (pre-tax) | 4.07x |
| Share count CAGR (dilution) | 0.6% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Helios makes hydraulic and electronic components for capital equipment across two segments, Hydraulics and Electronics, and the counterintuitive finding is that the smaller Electronics arm is the faster grower: it jumped 29.1% year over year in Q1 2026 versus 10.1% for the larger Hydraulics segment.
- The biggest risk is that the company sells into cyclical capital-goods demand, which its 10-K ties to factors that can adversely affect the demand for capital goods, layered on net debt near $285 million, roughly 3.6 times operating income.
- Watch the raised 2026 guidance of about $855 million revenue and $2.88 adjusted EPS at the midpoint; the next prints show whether the Q1 demand surge in recreational, agriculture, and health markets is a genuine recovery or an inventory restock.
Bull Case
The surprising thing about Helios is which engine is pulling. The name and the heritage are hydraulics, but the standout in the most recent quarter was the smaller Electronics segment, which grew 29.1% year over year to $89.2 million while Hydraulics grew a respectable 10.1% to $139.2 million. Electronics carries the higher-margin, more differentiated work, and its outpacing of the legacy business is the quiet shift in the mix that the headline revenue number obscures. A company that is quietly tilting toward its better segment is improving its economics even before the cycle helps.
And the cycle is helping. Q1 2026 revenue rose 16.8% to $228.4 million, net income nearly tripled to $19.7 million from $7.3 million a year earlier, and the operating margin jumped from 8.7% to 13.1% as gross margin expanded from 30.6% to 32.8%. That margin move is the operating leverage capital-goods makers get when volume returns: the same factories spread fixed costs over more units, and profit grows far faster than sales. Demand strengthened across recreational, mobile, agriculture, and health end markets, a breadth that suggests a real upturn rather than one lucky vertical.
Management responded by raising the year. Full-year 2026 revenue guidance went to a midpoint near $855 million and adjusted EPS to about $2.88, increases of roughly 1.8% and 4.5% over the prior outlook. The segment economics behind the guidance are real and disclosed: the FY2024 filing shows Hydraulics and Electronics generating combined gross profit of $252.3 million on $805.9 million of sales. The bull case is an industrial that has already shown the margin upside when volume comes back, is shifting toward its richer segment, and is being run by a management team confident enough to raise guidance into the recovery.
Bear Case
The bear case starts with where Helios sits on the demand cycle. This is a capital-goods supplier, and its end markets, recreational vehicles, agriculture, mobile equipment, rise and fall with industrial spending. The company's own 10-K lists the forces it cannot control: factors that can adversely affect the demand for capital goods, supply-chain disruption, and conditions in the capital markets including the interest-rate environment. The Q1 2026 surge, with revenue up 17% and operating margin leaping to 13.1%, is exactly the kind of print that looks best near a cyclical peak. Peak earnings are not sustainable earnings, and a 169% jump in net income off a depressed year-ago base flatters the run rate.
The operating leverage that powers the bull case runs in reverse just as hard. When volume returns, fixed costs spread and margins soar; when it recedes, the same fixed base crushes margins on the way down. The year-ago quarter shows the floor: an 8.7% operating margin and $7.3 million of net income. An investor underwriting today's 13.1% margin as the new baseline is extrapolating the top of a cycle, and the segment that surged hardest, Electronics at 29%, is also the one most exposed to short-cycle demand swings.
The balance sheet adds leverage to the cyclicality. Net debt sits near $285 million against trailing operating income, roughly 3.6 times, and the debt is amortizing on a rising schedule: the term loan's quarterly principal payments step up from $3.75 million toward $5.6 million in June 2026 and $7.5 million in June 2028, per the filing. That is fixed cash out the door regardless of where the cycle is. And the price makes all of this acute. At about 47 times operating income, the market is paying for company-wide growth to hold at its self-funding ceiling for roughly twelve years; historically only about 14% of comparable fast-growers sustained that pace for a decade. Only the forward-growth methods reach the price; the asset, earnings-power, and peer-multiple lenses all read it as richly valued. The bear case is the oldest one in industrials: a cyclical priced as a secular compounder at the moment its margins are at the top of the cycle.
Valuation
Helios is priced like a compounder, and the inversion shows just how demanding that is. At about $90 a share the stock trades near 47 times operating income, a level that implies company-wide operating growth holding at its self-funding ceiling for roughly twelve years. The near-term growth rate is within what the company has recently delivered; the stretch is entirely in the duration. The price is not betting on a fast year, it is betting on a long one, and history is unkind to that bet: only about 14% of comparable fast-growers sustained the pace for a decade.
The families of method line up behind that caution. Only the forward-growth approach reaches the current price; the asset-based, earnings-power, and peer-multiple lenses all read the stock as richly valued. When every static method sits below the price and only the growth lens reaches it, the premium is a pure durability bet, and for a cyclical industrial that bet is being placed at a point when margins have just spiked. The current operating margin near 9% on a trailing basis, against the 13.1% printed in the strong quarter, is itself the tension: the inversion needs only about 6.9% to hold, but the price is paying for far more for far longer.
Leverage and measurement both warrant a flag. Net debt near $285 million runs about 3.6 times operating income, and the term loan amortizes on a stepping-up schedule, so a chunk of cash flow is committed to debt service through the next few years. One measurement note: the trailing operating income read from the quarterly filings sits below the record-basis figure the headline multiple uses, a gap that reflects two different accounting windows rather than an error, so the 47-times figure is one solve under one set of assumptions rather than a precise fact. What is not in doubt is the shape of the bet: a leveraged cyclical priced for secular compounding, where the downside is a margin that has already shown it can halve.
Catalysts
The Q1 2026 print, reported in mid-May, was the catalyst that moved the stock, and it moved it up sharply on a clear beat. Revenue of $228.4 million rose 16.8% year over year, diluted EPS came in at $0.59, and net income nearly tripled to $19.7 million from $7.3 million a year earlier. The growth was led by Electronics at 29.1% and Hydraulics at 10.1%, with demand strengthening across recreational, mobile, agriculture, and health markets, and margins expanding on both the gross and operating lines.
Management converted the beat into a raised outlook, lifting full-year 2026 revenue guidance to a midpoint near $855 million and adjusted EPS to about $2.88, increases of roughly 1.8% and 4.5%. The forward question is whether the demand recovery is durable or a restock. The next two earnings reports, with updated segment growth and any further guidance revision, are the checkpoints; an industrial coming off a soft year can post one strong quarter on inventory replenishment that does not repeat. Watch whether Electronics holds its growth lead and whether the operating margin sustains near the Q1 level or fades back toward the high single digits that defined the prior year.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- GTES (Gates Industrial Corporation plc)
- FY2025 10-K: …to grow or maintain our competitive position or margins. We compete in a wide variety of end markets with a broad portfolio of products. Our ability to compete effectively in each end market depends on how successfully we anticipate and respond to various local competitive factors, such as product offerings, customer…
- FY2025 10-K: …a variety of industrial and automotive customers. Our industrial OEM customers cover a diverse range of industries and applications and many of our largest OEM customers manufacture construction and agricultural equipment. 32 Table of Contents During Fiscal 2025, we realized modest growth in our aftermarket channel…
- TKR (TIMKEN CO)
- FY2025 10-K: Industrial Corp. The e-business service focuses on information and business services for authorized distributors. Timken has entered into individually negotiated contracts with some of its customers. These contracts may extend for one or more years and, if a price is fixed for any period extending beyond current…
- FY2025 10-K: …condition or results of operations could be negatively affected. Risk Relating to our Business The bearing and industrial motion industries are highly competitive, and this competition results in significant pricing pressure for our products that could affect our revenues and profitability. The global bearing…
- KMT (KENNAMETAL INC)
- FY2025 10-K: …$6 million and the net effect of increased tariffs of approximately $4 million. These factors were partially offset by restructuring benefits of approximately $23 million, pricing, lower raw material costs, an incremental year-over-year benefit of approximately $13 million from an advanced manufacturing production…
- FY2025 10-K: …achieve all anticipated benefits of restructuring, Commercial Excellence growth initiatives and Operational Excellence initiatives; our foreign operations and international markets, such as currency exchange rates, different regulatory environments, trade barriers, exchange controls, and social and political…
- GRC (The Gorman-Rupp Company)
- FY2025 10-K: Gross margin 30.6 % 31.0 % Gross profit was $209.1 million for 2025, resulting in gross margin of 30.6%, compared to gross profit of $204.3 million and gross margin of 31.0% for the same period in 2024. Gross profit for 2025 included $2.7 million of one-time facility optimization costs. The 40 basis point decrease in…
- FY2025 10-K: …Pricing pressures may require the Company to adjust the prices of its products downward to stay competitive. The Company may not be able to compete successfully with its existing competitors or with new competitors. Failure to compete successfully could negatively impact the Company's sales, operating margins and…
- FLS (FLOWSERVE CORP)
- FY2025 10-K: …Company's products and services are based on technological advances. In addition, the Company will need to compete for talent that is familiar with such technologies, including upskilling its workforce. There can be no assurance that the Company will continue to compete effectively with its industry peers as new…
- FY2025 10-K: …this Annual Report. Business Functions Our business segments share a focus on industrial flow control technology and have a number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our…
- MWA (MUELLER WATER PRODUCTS, INC.)
- FY2025 10-K: …on trends, value creation, long-term strategies and the execution or acceleration thereof, operational improvements, inventory positions, the benefits of capital investments, financial or operating performance, including driving increased margins, operational and commercial initiatives, capital allocation and growth…
- FY2025 10-K: …Water Management Solutions business unit were approximately 42% of fiscal 2025 consolidated net sales. Business Strategy Our business strategy is to capitalize on the large, attractive and growing water infrastructure markets worldwide. Key elements of this strategy are as follows: Improve operational excellence and…
- CXT (CRANE NXT, CO.)
- FY2025 10-K: …delays in fulfilling orders, increased lead times, and potential loss of sales or customer relationships. Conversely, our inability to adequately and timely respond to potential declines in global demand for our products and services to properly align our cost base could have an adverse effect on our financial…
- FY2025 10-K: …and financial insti tutions. Key research and development and manufacturing facilities are located in the United States, United Kingdom, Sweden and Malta. 7 Other Matters Relating to Our Business as a Whole Competitive Conditions Our businesses participate in markets that are highly competitive. Because of the…
- HLMN (Hillman Solutions Corp.)
- FY2025 10-K: …current operating margins while the tariffs are in effect, we must be able to increase prices with our customers and find alternative, similarly priced sources that are not subject to the tariffs. If we are unable to effectively implement these countermeasures, our operating margins will be impacted. In addition, the…
- FY2025 10-K: …benefits from any acquisition. 9 | December 27, 2025 Form 10-K Unfavorable changes in the current economic environment may make it difficult to acquire businesses in order to further our growth strategy. We will continue to seek acquisition opportunities both to expand into new markets and to enhance our position in…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release