Why You Should Buy The Dip In Hudson Technologies (HDSN)

Hudson Technologies (HDSN) reported seemingly mixed Q3 results last night. Specifically, due to lower selling prices for certain refrigerants, revenues for the period of $76.5 million fell $8.0 million short of the $84.5 million analysts had been projecting. But even as the gap between its inventory costs and sales prices continued to narrow as expected, the company reported adjusted earnings of 34 cents per share, which comfortably exceeded the 31-cent consensus estimate. This was driven by the favorable shift in mix it experienced towards higher margin carbon sales and sales related to its program with the Defense Logistics Agency, which helped HDSN maintain its gross margin at the solid 40% level it had recovered to in Q2 (from just 32% in Q4 of 2022 and 39% in Q1) and well above its long-term target of 35%.