Hammond Power Solutions (HPS.A) AI Stock Analysis

• Market Cap: $1.52B
• Dividend Yield: 0.86%
• Average Volume (3M): 31.48K
• Price to Earnings (P/E): 16.9
• Beta (1Y): 1.72
• Revenue Growth: 9.52%
• EPS Growth: 61.44%
• Country: CA
• Employees: 2,121
• Sector: Industrials
• Sector Strength: 86
• Industry: Electrical Equipment & Parts
• EPS (TTM): 2.20
• Shares Outstanding: 9,126,624
• 10 Day Avg. Volume: 37,623
• 30 Day Avg. Volume: 31,480
• PEG Ratio: 0.03
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.60
• 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: $148.50
• Price Target Upside: 16.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 78 Outperform
• Price Target: C$137.00 ▲(7.45%Upside)

Hammond Power Solutions receives a solid overall stock score, driven primarily by strong financial performance and positive corporate events. The technical analysis and valuation offer a mixed but generally positive view, while concerns from the earnings call about margins and cash flow slightly temper the score.

Hammond Power Solutions Business Overview & Revenue Model

Company Description

Hammond Power Solutions Inc., together with its subsidiaries, designs, manufactures, and sells custom electrical engineered magnetics, standard electrical dry-types, cast resins, liquid filled transformers, and wound magnetic products for electrical and electronic industries. The company offers autotransformers, buck-boost transformers, control transformers, distribution transformers, drive isolation transformers, encapsulated transformers, furnace transformers, multi-pulse transformers, pad mounted transformers, regulating transformers, and medium voltage distribution transformers, as well as reactors, active harmonic filters, dV/dT filters, and unitized substations. It serves the oil and gas, mining, steel, waste and water treatment, commercial construction, data centers and wind power generation industries in Canada, the United States, Mexico, and India. The company was founded in 1917 and is headquartered in Guelph, Canada.

How the Company Makes Money

Hammond Power Solutions generates revenue primarily through the design, manufacture, and sale of its dry-type transformers and related magnetic products. The company's key revenue streams include the sale of custom and standard transformers to industrial and commercial customers, as well as power conditioning products and reactors. HPS benefits from long-term relationships with distributors, OEMs, and end-users, which provide consistent demand for their products. Additionally, the company's strategic focus on sectors such as renewable energy and electrical infrastructure expansion contributes to its revenue growth. HPS also invests in continuous product innovation and expanding its market reach, which further enhances its profitability.

Hammond Power Solutions Financial Statement Overview

Summary

Hammond Power Solutions exhibits strong financial health, with significant revenue growth and profitability as indicated by the high gross and net profit margins. The balance sheet is robust, characterized by low leverage and a strong equity position. However, the decline in free cash flow growth highlights potential liquidity constraints that require careful capital management.

Income Statement

The income statement shows strong performance with a consistent upward trend in revenue and net income over the years. Gross Profit Margin stands at 32.7% for TTM, reflecting robust profitability, while Net Profit Margin is 11.2%, indicating efficient cost management. Revenue growth has been significant, with a TTM increase of 13.8% from the previous year, showcasing strong demand and market position. EBIT and EBITDA margins are also healthy at 15.8% and 17.3% respectively, underscoring operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a Debt-to-Equity Ratio of 0.15, indicating low financial leverage and a conservative capital structure. Return on Equity is impressive at 27.3% for TTM, highlighting effective use of equity to generate profits. The Equity Ratio is 64.4%, suggesting a strong equity base relative to total assets, which provides stability. However, slight increases in total liabilities warrant monitoring to ensure continued financial health.

Cash Flow

Cash flow analysis reveals a Free Cash Flow Growth Rate of -40.5% from the previous year, indicating a decline that could be due to increased capital expenditures. The Operating Cash Flow to Net Income Ratio is 0.62 for TTM, suggesting reasonable cash generation relative to accounting profit. The Free Cash Flow to Net Income Ratio is 0.16, which is relatively low and signals potential constraints in liquidity, despite positive operational cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	799.06M	788.34M	710.06M	558.46M	380.20M	322.10M
Gross Profit	261.29M	258.28M	231.01M	165.19M	102.43M	86.99M
EBITDA	138.38M	112.69M	96.00M	69.74M	30.05M	29.33M
Net Income	89.80M	71.53M	63.40M	44.83M	15.18M	14.06M
Balance Sheet
Total Assets	510.41M	493.14M	408.34M	302.67M	235.10M	189.39M
Cash, Cash Equivalents and Short-Term Investments	32.84M	34.09M	52.59M	28.13M	20.91M	14.79M
Total Debt	49.96M	36.23M	37.03M	17.59M	28.76M	25.39M
Total Liabilities	181.58M	185.10M	177.97M	125.78M	109.10M	75.48M
Stockholders Equity	328.82M	308.04M	230.38M	176.89M	126.00M	113.92M
Cash Flow
Free Cash Flow	14.32M	24.05M	23.55M	27.68M	14.38M	14.75M
Operating Cash Flow	55.46M	64.75M	44.11M	37.01M	20.45M	19.68M
Investing Cash Flow	-63.66M	-62.98M	-19.36M	-12.67M	-10.91M	-4.75M
Financing Cash Flow	-15.51M	-24.21M	755.00K	-22.30M	-4.26M	-24.18M

Hammond Power Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 127.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HPS.A, the sentiment is Positive. The current price of 127.5 is above the 20-day moving average (MA) of 116.37, above the 50-day MA of 104.73, and above the 200-day MA of 110.57, indicating a bullish trend. The MACD of 6.21 indicates Negative momentum. The RSI at 78.52 is Negative, neither overbought nor oversold. The STOCH value of 87.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HPS.A.

Hammond Power Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HPS.A	78 Outperform	$1.52B	16.90	31.84%	0.86%	9.52%	61.44%
Sector *	64 Neutral	kr63.63B	12.55	1.54%	8.67%	0.04%	-3.90%
ELVA		$130.20M	―	-0.21%	―	―	―
HMM.A	73 Outperform	C$117.42M	6.30	16.38%	0.58%	7.70%	-2.20%
LPS	47 Neutral	C$16.31M	―	-200.00%	―	177.07%	29.71%
EXROF		$26.71M	―	-3009.52%	―	―	―
GRID	60 Neutral	C$153.40M	―	-45.20%	―	17.51%	-2.94%

Hammond Power Solutions Corporate Events

Hammond Power Solutions Declares Quarterly Dividend

Hammond Power Solutions Inc. announced a quarterly cash dividend of $0.275 per Class A and Class B share, payable on June 27, 2025, to shareholders of record as of June 20, 2025. This dividend is designated as an ‘eligible dividend’ under Canadian tax law, which may have implications for Canadian resident shareholders. The announcement reflects HPS’s ongoing commitment to providing shareholder returns and may influence investor perceptions and market positioning.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$169.00 price target. To see the full list of analyst forecasts on Hammond Power Solutions stock, see the TSE:HPS.A Stock Forecast page.

Hammond Power Solutions Reports Strong Shareholder Support at Annual Meeting

Hammond Power Solutions Inc. announced the results of its Annual General Meeting, where shareholders approved all proposed business items. This included the reappointment of KPMG LLP as auditors and the election of all director nominees, reinforcing the company’s governance and operational stability. The voting outcomes reflect strong shareholder support, which could positively impact the company’s strategic direction and stakeholder confidence.

Hammond Power Solutions Sees Sales Growth and Increased Backlog in Q1 2025

Hammond Power Solutions reported a 5.6% increase in sales for the first quarter of 2025, reaching $201 million, despite facing trade-tariff uncertainties. The company’s backlog grew by 17.7% from the previous quarter, driven by strong demand in certain markets, particularly data centers. Although there was a slight decline in gross margin due to increased material and labor costs, the company anticipates a favorable shift towards more custom product shipments with the early completion of a new factory. The company also announced a price increase to offset higher costs, which began to take effect in April 2025.

Hammond Power Solutions to Release Q1 2025 Financial Results

Hammond Power Solutions Inc. announced it will release its financial results for the first quarter of 2025 on May 1, 2025, after market close, followed by a conference call and webcast on May 2, 2025. This announcement allows stakeholders to gain insights into the company’s financial performance and strategic positioning, potentially impacting its operations and market perception.