Hurco Q2 Revenue Jumps 17% as Orders Rebound, But Recovery Path Is Unproven

Hurco Companies (HURC) reported fiscal second-quarter 2026 earnings on June 5, and the headline numbers look like a turn. Revenue rose 17% from the same quarter last year. Orders jumped even more sharply, the company said, though it did not disclose the exact order-growth figure in the release.

The industrial-controls maker, which sells computer-numeric-control systems and machine tools to small and midsize manufacturers, has been grinding through a prolonged demand slump. The Q2 print breaks that streak. Gross margins also improved, helped by a shift in product mix toward higher-margin systems and by lower component costs, according to the earnings statement.

Management pointed to stabilization in end markets. The company's largest segment, the Americas, saw a pickup in quoting activity and order conversion rates, executives said on the post-earnings call. Europe, which has been the drag for several quarters, showed sequential improvement, though the region remains below pre-2024 run rates.

The balance sheet remains clean. Hurco carries no long-term debt and held roughly $55 million in cash and short-term investments at quarter-end, enough to fund operations and the dividend through a slower recovery. The company maintained its quarterly payout.

A discounted cash flow model built on the Q2 run rate suggests the stock is undervalued by more than 100% relative to intrinsic value. That math assumes the current revenue trajectory holds and margins continue expanding. The problem is that one quarter does not make a trend. Hurco's end customers – job shops and contract manufacturers – are still cautious on capital spending. The order backlog, while improved, remains below historical averages.

The stock trades at roughly 12 times trailing earnings, a discount to the broader industrial sector. Value investors have circled the name before on the balance-sheet strength and the cyclical recovery thesis, only to watch the next quarter disappoint. The Q2 numbers reduce that risk but do not eliminate it.

What would confirm the turn is a third consecutive quarter of order growth and a further expansion in backlog. A miss on either metric in Q3 would put the DCF-based valuation thesis back on the shelf. The next catalyst is the fiscal third-quarter report, expected in early September.