Q2 Earnings Outperformers: Crane NXT (NYSE:CXT) And The Rest Of The Specialized Technology Stocks

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the specialized technology industry, including Crane NXT (NYSE:CXT) and its peers.

Companies in this sector, especially if they invest wisely, could see demand tailwinds as the world moves towards more IoT (Internet of Things), automation, and analytics. Enterprises across most industries will balk at taking these journeys solo and will enlist companies with expertise and scale in these areas. However, headwinds could include rising competition from larger technology firms, as digitization lowers barriers to entry in the space. Additionally, companies in the space will likely face evolving regulatory scrutiny over data privacy, particularly for surveillance and security technologies. This could make companies have to continually pivot and invest.

The 8 specialized technology stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.1% while next quarter’s revenue guidance was 1.5% below.

Thankfully, share prices of the companies have been resilient as they are up 8.4% on average since the latest earnings results.

Crane NXT (NYSE:CXT)

Born from a corporate transformation completed in 2023, Crane NXT (NYSE:CXT) provides specialized technology solutions for payment processing, banknote security, and authentication systems for financial institutions and businesses.

Crane NXT reported revenues of $404.4 million, up 9.1% year on year. This print exceeded analysts’ expectations by 5.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.

Aaron W. Saak, Crane NXT's President and Chief Executive Officer, stated: "Our second quarter results were in line with our expectations, with sales growth of approximately 9% and adjusted segment operating profit margin of approximately 24%. We are excited about the continued record high backlog in international currency and the positive momentum in CPI gaming orders."

Interestingly, the stock is up 21.9% since reporting and currently trades at $68.63.

Is now the time to buy Crane NXT? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: Napco (NASDAQ:NSSC)

Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ:NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.

Napco reported revenues of $50.72 million, flat year on year, outperforming analysts’ expectations by 14.1%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.

Napco delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 36.3% since reporting. It currently trades at $43.20.

Is now the time to buy Napco? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q2: PAR Technology (NYSE:PAR)

Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE:PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.

PAR Technology reported revenues of $112.4 million, up 43.8% year on year, exceeding analysts’ expectations by 1.3%. Still, it was a slower quarter as it posted a significant miss of analysts’ ARR estimates.

As expected, the stock is down 34.7% since the results and currently trades at $37.86.

Read our full analysis of PAR Technology’s results here.

OSI Systems (NASDAQ:OSIS)

With security scanners deployed at airports and borders worldwide and patient monitors used in hospitals across the globe, OSI Systems (NASDAQ:OSIS) designs and manufactures specialized electronic systems for security screening, patient monitoring, and optoelectronic applications.

OSI Systems reported revenues of $505 million, up 5% year on year. This print beat analysts’ expectations by 2.3%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ revenue and full-year EPS guidance estimates.

The stock is up 11.7% since reporting and currently trades at $249.38.

Read our full, actionable report on OSI Systems here, it’s free for active Edge members.

Zebra (NASDAQ:ZBRA)

Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ:ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.

Zebra reported revenues of $1.29 billion, up 6.2% year on year. This result was in line with analysts’ expectations. It was a very strong quarter as it also produced a solid beat of analysts’ full-year EPS guidance estimates.

Zebra had the weakest performance against analyst estimates among its peers. The stock is down 13.1% since reporting and currently trades at $297.61.

Read our full, actionable report on Zebra here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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