Hillman Solutions Corp. (HLMN): what the price assumes

In the published model solve dated 2026-Q2, anchored at $7.77, Hillman Solutions Corp. (HLMN) is priced for +12.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-31 · Source: https://boothcheck.com/report/HLMN

Headline

FieldValue
TickerHLMN
CompanyHillman Solutions Corp.
Current price$7.77/sh
CompositionFastening and Hardware 68% / Personal Protective 17% / Keys and Key Fobs 12% / Engraving and Resharp 3%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)5.4%
Operating margin today6.8%
Margin compression (value-band)-1.4pp
Implied growth12.4%
Multiple paid22x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.3% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
vs own history-0.04σ
cohort percentile (of 225 peers)58

Valuation X-Ray

The price is justified by relative-multiple; asset-based/earnings-power land below the price.

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.

FamilyMedian price/FVModelsReads
Asset5.25x4expensive
Earnings2.66x2expensive
Relative1.19x2expensive
Growth1.25x2expensive

Families that justify the price: Relative Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.4%); the inversion above states its own rate.

Per-Model Detail (n=10)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noFCF base $0.0B, growth 5% (input: historical growth), terminal g 4.0%, WACC 7.4%, 5yr projection
DCF Exit MultipleGrowth$6.431.21xyesExit EV/EBITDA: 7.2x / 9.2x / 11.2x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative——noP/E 25.34x (blended: static sector reference 18x + trailing (TTM) 42x), scenarios: 21.3x / 25.3x / 29.4x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$1.983.92xyesBV/sh $6.20, ROE (TTM) 3.0%, ke 9.3%
Two-Stage Excess ReturnAsset$1.186.58xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$6.001.30xyesRev $1.6B, growth 5% (input: historical growth; tapered), Terminal P/S: 0.8x / 1.0x / 1.1x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$6.301.23xyesEPS $0.18, growth 35% (input: historical EPS growth), PEG=1.21 (Fair)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$0.01777.00xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.06B × (1−21%) / WACC 7.4% → EPV (no growth) (excluded from median)
Residual IncomeAsset$0.878.93xyesBV $6.20 + 5yr PV of (ROE (TTM) 3.0% − Kₑ 9.3%) × BV; BV grows 1.9%/yr
Graham NumberAsset$5.011.55xyes√(22.5 × EPS $0.18 × BVPS $6.20) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $0.25B × sector EV/EBITDA 12.0x
FCF YieldEarnings$0.01777.00xyesFCF $22.1M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.01777.00xyesSBC-adj FCF $0.01B (FCF $0.02B − SBC $0.01B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$5.811.34xyesEPS $0.18 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$0.2432.38xyesBV $6.20 × (ROIC 0.3% / WACC 7.4%) (excluded from median)
P/Sales SectorRelative——noRevenue $1.56B × sector P/S 2.5x
PEG Fair ValueRelative$6.751.15xyesEPS $0.18 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$1.953.98xyesEPS $0.18 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Hardware and Protective Solutionsoperatingenterprise$1.2b—withheldunresolved no unit value
Robotics and Digital Solutionsoperatingenterprise$220.0m—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt$710.1m
Net debt / NOPAT (after-tax)8.47x
Net debt / operating income (pre-tax)6.69x
Share count CAGR (dilution)0.3%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

The clearest read on Hillman is where the price sits against the methods. At about $8 (June 27, 2026) a share the stock is supported by the peer-multiple lens, while the asset-based and earnings-power approaches call it expensive; only one family of method reaches the price. That is the signature of a business the market values for what it does rather than what it owns, and what Hillman does is hard to replicate. It runs an in-store service network that stocks and replenishes thousands of low-cost hardware items directly on retailers' shelves, the kind of high-touch, low-ticket logistics that a home center has little interest in running itself. The 10-K describes the breadth plainly: it supplies hardware items, threaded rod, personal protective equipment, and letters, numbers, and signs across the United States and Mexico. Switching that out is a project no retailer undertakes lightly.

The Robotics and Digital Solutions segment is the bright spot inside a mixed quarter. Its key-duplication and engraving kiosks grew net sales 6% in Q1 2026 and lifted adjusted EBITDA 11.4% to $16.2 million, the one part of the business expanding margin while the rest digested tariff costs. These are automated, high-margin machines sitting in retail footprints Hillman already serves, a razor-and-blade annuity layered on top of the core distribution business.

Management is leaning into the recovery. It described the first quarter as the bottom for gross and EBITDA margin, with sequential improvement expected as high-cost, tariff-affected inventory cycles out, and it raised full-year net sales guidance to a range of $1.63 to $1.73 billion after two post-quarter acquisitions expected to add $30 million in sales. The implied operating-profit growth the price needs, around 14.5% a year, is within what Hillman has recently delivered. The bull case is a sticky, service-driven distributor with a growing kiosk annuity, priced where only the peer-multiple lens has to be right.

Bear Case

The deepest vulnerability is not a competitor; it is a customer. Hillman's growth runs through a small number of big-box retailers, and the company says so directly: in its 10-K it warns that if the big box chain stores are materially adversely impacted by the changing retail landscape, this could have a negative effect on our results of operations, adding that these two customers have been key components of our growth. That is the disruption thesis in concentrated form. Hillman does not sell to millions of buyers; it sells to a handful of giants whose own fortunes, shelf decisions, and negotiating leverage govern its volume. A single big retailer rethinking its in-store service vendor, or simply pressing harder on price, hits Hillman where it cannot easily diversify away.

The most recent quarter showed the model under strain. Q1 2026 revenue of $370.1 million grew only 3% and missed consensus by about $10 million, with the growth coming almost entirely from new business wins (roughly 5%) against a 2% drag from core performance. Protective Solutions fell 17% on destocking and weak glove sell-through, adjusted EBITDA dropped 8% to $50.1 million, and margin compressed 170 basis points on tariff-inflated inventory and soft volume. The company posted a small net loss for the quarter. A distributor whose core is shrinking while new wins paper over the gap is running to stand still.

Then there is the debt. Net debt sits near $705 million against trailing operating income, more than six times, and consumer-facing demand is exposed to exactly the macro forces the filing lists: a higher cost of borrowing, slower growth in disposable income, and inflation pressuring discretionary spending. At roughly 23 times operating income the price already embeds about 14.5% annual operating-profit growth for five years, a pace only about 45% of comparable fast-growers have sustained, while the asset and earnings-power methods read the stock as expensive. The bear case is a levered distributor with concentrated customers and a soft core, asked to compound through a consumer environment its own filing flags as fragile.

Valuation

At about $8 a share Hillman trades near 23 times operating income, and the inversion translates that into a concrete demand: company-wide operating profit growing about 14.5% a year for five years. The reassuring half is that the rate is within what the company has recently delivered. The cautioning half is durability, only about 45% of comparable fast-growers sustained that pace for five years, and Hillman is being asked to do it from a low-margin distribution base with a soft core segment.

The families of method split in a way a value buyer should read carefully. The peer-multiple lens supports the current price, but the asset-based and earnings-power approaches both call it expensive. When only the relative-multiple family justifies the price, the stock is leaning on comparison to its industrial peers rather than on the cash its own operations throw off, and that is a thinner support than a value investor usually wants. There is real asset value here, but it is carried as goodwill from acquisitions rather than as hard assets that anchor a floor.

Leverage is the number that should dominate the valuation discussion. Net debt near $705 million runs more than six times trailing operating income, the heaviest constraint in the picture, and interest expense is a fixed claim that the current operating margin near 6.8% has limited room to cover when volume softens. One measurement caveat: the trailing operating income from the quarterly filings sits well below the record-basis figure the headline multiple uses, so the 23-times read is one solve under one set of assumptions, not a precise fact, and on the lower operating-income base the leverage looks heavier still. The valuation is less a growth question than a balance-sheet one: the equity is a levered residual on a distributor whose margin is recovering from a tariff-driven trough, and the debt load magnifies whatever the core volume does next.

Catalysts

The Q1 2026 report, released in early June, was a revenue miss with a margin story attached. Net sales of $370.1 million rose 3% year over year but came in roughly $10 million light of consensus, and the company posted a basic EPS loss of $0.02 against a near-breakeven year earlier. Adjusted EBITDA fell 8% to $50.1 million and margin contracted 170 basis points to 13.5%, which management attributed to high-cost inventory from tariff timing and soft volume. Segment results diverged sharply: Hardware Solutions rose 7%, Protective Solutions dropped 17% on destocking and weak glove demand, and Robotics and Digital Solutions grew 6% with EBITDA up 11.4%.

The forward setup rests on two levers. First, margin: management explicitly called Q1 the bottom for gross and EBITDA margin and guided to sequential improvement as the tariff-affected inventory cycles through. Second, acquisitions: two deals completed after the quarter are expected to contribute about $30 million in net sales, prompting a $30 million raise to full-year guidance, now $1.63 to $1.73 billion at a $1.68 billion midpoint. The next earnings reports are the test of whether the margin trough was real, whether Protective Solutions stabilizes, and whether the acquisitions deliver without adding further to an already heavy debt load.

Peer Cohorts (Per Segment, With Filing Citations)

Hardware and Protective Solutions (reported)

Robotics and Digital Solutions (reported)

Methodology Note

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 call

View the full interactive HLMN report on boothcheck