Hammond Mfg Cl A SV (HMM.A) AI Stock Analysis

• Market Cap: C$120.60M
• Dividend Yield: 0.54%
• Average Volume (3M): 10.45K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.69
• Revenue Growth: 12.69%
• EPS Growth: -7.21%
• Country: CA
• Employees: 900
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 0.17
• Shares Outstanding: 8,556,000
• 10 Day Avg. Volume: 15,211
• 30 Day Avg. Volume: 10,449
• PEG Ratio: -0.41
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.45
• P/FCF Ratio: 6.43
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: C$12.00 ▲(9.09% Upside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

The score is driven primarily by attractive valuation (low P/E) and solid overall financial health with strong multi-year growth. This is tempered by 2025 margin/return compression and historically uneven cash flow, while technical indicators are moderately supportive rather than strongly bullish.

Positive Factors

Sustained Revenue Growth

The company has roughly doubled revenue over five years, demonstrating durable demand for its enclosures and power components. Persistent top-line expansion supports scale advantages, broader distribution reach and product-market fit, which underpin medium-term cash generation and investment capacity.

Improving Balance Sheet

Equity growth and falling leverage indicate stronger financial flexibility and resilience to cyclical swings. A moderate and improving debt profile preserves borrowing capacity for capex or working capital and reduces refinancing risk, supporting sustainable operations through industry cycles.

Positive Free Cash Flow Generation

Consistent positive FCF in 2025 signals the business can fund operations and returns internally. Improving FCF-to-income ratios bolster long-term investment and dividend capacity, and persistent generation supports deleveraging or funding of higher-margin product development over the medium term.

Negative Factors

Margin Compression

Falling gross and net margins reduce operating leverage and the firm's ability to convert revenue growth into profits. If raw material or mix pressures persist, margin compression can meaningfully weaken returns, constrain reinvestment, and make earnings more sensitive to demand softness over the coming quarters.

Volatile Cash Flow History

Historical swings in operating and free cash flow signal earnings quality variability tied to working capital and cyclical end markets. This volatility complicates planning for capex, dividends, or debt reduction and raises execution risk if cash generation falters during downturns.

Earnings & Return Pressure

Declining EPS growth and materially lower ROE indicate profitability hasn't kept pace with equity expansion. Persistent deterioration in returns can signal margin, pricing or capital allocation challenges and may limit the company's ability to generate attractive shareholder returns over the medium term.

Hammond Mfg Cl A SV Business Overview & Revenue Model

Company Description

Hammond Manufacturing Company Limited, together with its subsidiaries, designs, manufactures, and sells electrical and electronic components in Canada, the United States, and internationally. The company offers electrical enclosures, including mild and stainless steel, aluminum, non-metallic, disconnect, modular freestanding, operator interface, and commercial enclosures; wireway and trough, climate control, and data communication infrastructure products; and general accessories. It also provides small enclosures, such as diecast, plastic, extruded, rock mounted, and industrial enclosures; and general purpose metal and development board products, chassis, and handles and accessories. In addition, the company offers rack mounting solutions, such as open frame network racks, server racks and cabinets, wall mount racks and cabinets, and rack accessories; rack mount, heavy duty, and surge suppression outlet strips, and outlet accessories; and power, line, audio, energy limiting, instrument, guitar replacement, and classic transformers, as well as chokes and reactors. Further, it provides magnetics for tube applications, and amateur radio and commercial broadcast products, as well as modification and technical support services. The company serves electrical and electronic manufacturers, utilities, and institutions through original equipment manufacturers and a network of agents and distributors. Hammond Manufacturing Company Limited was founded in 1917 and is headquartered in Guelph, Canada.

How the Company Makes Money

Hammond Manufacturing makes money primarily by manufacturing and selling its electrical/electronic hardware products to customers (typically via industrial/electronics distribution channels and direct-to-customer sales, where applicable). Its key revenue streams come from: (1) Electrical enclosures/cabinets and related accessories—standard and application-specific housings used to protect equipment in industrial and commercial environments; (2) Transformer, reactor, and power-related components—products used in power conversion, control, and distribution applications; and (3) Complementary hardware/accessories that attach to or configure its core products (e.g., mounting and thermal-management-related items where applicable). Revenue is recognized from product shipments/sales, and earnings are influenced by manufacturing throughput, input costs (such as steel and other materials), product mix (standard vs. more specialized/higher-value items), demand from industrial capex and electronics markets, and the breadth/reach of its distribution relationships. Specific details on material customer concentration, named strategic partnerships, or precise segment revenue splits are null.

Hammond Mfg Cl A SV Financial Statement Overview

Summary

Strong multi-year revenue growth and continued profitability supported by a reasonably healthy, improving leverage profile. Offsetting this are 2025 margin/ROE compression and less consistent cash flow history (including prior negative FCF), which lowers confidence in near-term earnings quality.

Income Statement

Revenue has expanded materially over the period (from $148.2M in 2020 to $281.4M in 2025), showing solid long-term growth, though the latest annual growth rate slowed in 2025 versus prior years. Profitability is positive but has softened recently: gross margin fell to ~32.5% in 2025 (vs ~37.1% in 2024), and net margin declined to ~5.1% (vs ~7.5% in 2024), with net income down to $14.4M from $18.4M. Overall, the business remains profitable with decent operating margins, but the 2025 margin compression is a key near-term watch item.

Balance Sheet

The balance sheet looks reasonably healthy, with equity rising to $131.6M in 2025 (from $61.5M in 2020) and assets growing alongside the business. Leverage is moderate and improving: debt-to-equity is ~0.46 in 2025, down from ~0.57–0.59 in 2022–2023, even as total debt increased to $60.3M. Returns have cooled (return on equity ~10.9% in 2025 vs ~15.4% in 2024 and ~19.0% in 2023), indicating profitability has not kept pace with the larger equity base.

Cash Flow

Cash generation is positive with operating cash flow of $25.5M and free cash flow of $19.8M in 2025, and free cash flow has grown year-over-year in recent periods. However, cash flow has been more volatile across the cycle: free cash flow was negative in 2022 and modest in 2023, and 2025 operating cash flow fell versus 2024 ($33.7M). Free cash flow relative to net income improved to ~0.78 in 2025 (from ~0.64 in 2024), but overall consistency is weaker than profitability trends alone would suggest.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	281.41M	244.90M	238.28M	225.92M	190.13M
Gross Profit	91.39M	90.90M	86.21M	71.63M	56.00M
EBITDA	33.38M	37.79M	36.61M	25.54M	18.43M
Net Income	14.41M	18.37M	18.76M	12.00M	7.70M
Balance Sheet
Total Assets	240.26M	214.79M	189.54M	168.00M	136.98M
Cash, Cash Equivalents and Short-Term Investments	33.07M	24.71M	8.89M	942.00K	4.07M
Total Debt	60.30M	56.73M	56.45M	48.39M	35.53M
Total Liabilities	108.63M	95.25M	90.54M	86.46M	68.28M
Stockholders Equity	131.64M	119.53M	99.00M	81.55M	68.69M
Cash Flow
Free Cash Flow	19.79M	21.61M	3.13M	-15.39M	3.36M
Operating Cash Flow	25.47M	33.66M	16.89M	4.82M	14.92M
Investing Cash Flow	-5.78M	-12.04M	-13.62M	-20.16M	-11.54M
Financing Cash Flow	-10.17M	-7.37M	5.20M	11.09M	-1.96M

Hammond Mfg Cl A SV Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HMM.A, the sentiment is Negative. The current price of 11 is above the 20-day moving average (MA) of 10.98, above the 50-day MA of 10.67, and above the 200-day MA of 10.39, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.76 is Neutral, neither overbought nor oversold. The STOCH value of 27.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:HMM.A.

Hammond Mfg Cl A SV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HMM.A	75 Outperform	C$120.60M	8.83	11.26%	0.54%	12.69%	-7.21%
HPS.A	67 Neutral	C$2.26B	21.07	24.68%	0.69%	11.19%	19.13%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GRID	57 Neutral	C$248.00M	83.51	-13.77%	―	26.28%	27.86%
LPS	43 Neutral	C$13.20M	-7.82	-1552.79%	―	27.76%	-0.37%