Hammond Power Solutions (HPS.A) AI Stock Analysis

• Market Cap: C$2.02B
• Dividend Yield: 0.65%
• Average Volume (3M): 94.13K
• Price to Earnings (P/E): 25.0
• Beta (1Y): 2.19
• Revenue Growth: 11.19%
• EPS Growth: 19.13%
• Country: CA
• Employees: 2,121
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.56
• Shares Outstanding: 9,126,624
• 10 Day Avg. Volume: 58,332
• 30 Day Avg. Volume: 94,125
• PEG Ratio: 1.67
• Price to Book (P/B): 4.95
• Price to Sales (P/S): 1.93
• P/FCF Ratio: 63.40
• 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: C$203.00
• Price Target Upside: 19.75% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 6.56
• Revenue Forecast (FY): C$876.95M

• Rating: 70 Outperform
• Price Target: C$180.00 ▲(6.18% Upside)

Hammond Power Solutions demonstrates robust financial performance with strong revenue growth and a solid balance sheet. However, cash flow challenges and valuation concerns weigh on the overall score. The earnings call provided positive guidance, but margin pressures remain a concern.

Positive Factors

Revenue Growth

Strong revenue growth driven by U.S. shipments and gains in all market channels reflects robust demand and effective market penetration.

Market Expansion

Increasing manufacturing capacity positions the company to meet future demand and supports long-term growth prospects.

Strong Backlog

A significant backlog indicates sustained demand and provides revenue visibility, supporting future financial stability.

Negative Factors

Margin Pressure

Decreasing margins due to material cost pressures and overhead expenses could impact profitability if not managed effectively.

Tariff Impact

Tariff changes increase input costs, pressuring margins and potentially affecting competitive pricing strategies.

Cash Flow Challenges

Negative free cash flow due to high capital expenditures could constrain liquidity and limit investment in growth opportunities.

Hammond Power Solutions Business Overview & Revenue Model

Company Description

Hammond Power Solutions (HPS.A) is a leading manufacturer of electrical and power distribution products, primarily serving the industrial and commercial sectors. The company specializes in designing and producing a wide range of transformers, inductors, and related components that are essential for power management and distribution. HPS operates with a focus on innovation and quality, catering to diverse applications including renewable energy, automation, and electrical infrastructure.

How the Company Makes Money

Hammond Power Solutions generates revenue through the sale of its core products, which include dry-type transformers, encapsulated transformers, and custom magnetic components. The company's revenue model is primarily based on direct sales to distributors, original equipment manufacturers (OEMs), and end-users across various industries. Key revenue streams include the sale of standard and custom transformers, as well as services related to product design and engineering. HPS has established significant partnerships with various distributors and industry players, which enhance its market reach and contribute to steady sales growth. Additionally, demand from sectors such as renewable energy and electric vehicles is increasingly influencing the company's earnings, as the need for efficient power solutions rises.

Hammond Power Solutions Financial Statement Overview

Summary

Hammond Power Solutions shows strong financial health with robust revenue growth and profitability. The balance sheet is solid with low leverage, though the recent increase in debt and negative free cash flow growth pose potential risks. Continued focus on cash flow management will be crucial to sustain long-term growth.

Income Statement

Hammond Power Solutions has demonstrated strong revenue growth with a 3.41% increase in TTM, supported by solid gross and net profit margins of 32.11% and 9.63%, respectively. The EBIT and EBITDA margins are healthy at 13.25% and 15.18%, indicating efficient operational management. The company has shown consistent revenue growth over the years, reflecting a robust business model.

Balance Sheet

The balance sheet is stable with a low debt-to-equity ratio of 0.20, indicating prudent financial leverage. Return on equity is strong at 25.79%, showcasing effective use of equity to generate profits. The equity ratio stands at 62.06%, suggesting a solid capital structure. However, the increase in total debt over the TTM period warrants monitoring.

Cash Flow

Cash flow analysis reveals challenges with a negative free cash flow growth rate of -142.82% in TTM, primarily due to increased capital expenditures. The operating cash flow to net income ratio is moderate at 0.20, while the free cash flow to net income ratio is negative, highlighting potential liquidity concerns. Despite these issues, the company has maintained positive operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	826.27M	788.34M	710.06M	558.46M	380.20M	322.10M
Gross Profit	265.35M	258.28M	231.01M	165.19M	102.43M	86.99M
EBITDA	125.39M	112.69M	96.00M	69.74M	30.05M	29.48M
Net Income	79.59M	71.53M	63.40M	44.83M	15.18M	14.06M
Balance Sheet
Total Assets	526.05M	493.14M	408.34M	302.67M	235.10M	189.39M
Cash, Cash Equivalents and Short-Term Investments	27.86M	34.09M	52.59M	28.13M	20.91M	14.79M
Total Debt	64.26M	36.23M	37.03M	17.59M	28.14M	25.39M
Total Liabilities	199.61M	185.10M	177.97M	125.78M	109.10M	75.48M
Stockholders Equity	326.44M	308.04M	230.38M	176.89M	126.00M	113.92M
Cash Flow
Free Cash Flow	-6.13M	24.05M	23.55M	27.68M	14.38M	14.75M
Operating Cash Flow	36.84M	64.75M	44.11M	37.01M	20.45M	19.68M
Investing Cash Flow	-65.50M	-62.98M	-19.36M	-12.67M	-10.91M	-4.75M
Financing Cash Flow	6.67M	-24.21M	755.00K	-22.30M	-4.26M	-24.18M

Hammond Power Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 169.52
• 50DMA: Positive
• 100DMA: Positive
• 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:HPS.A, the sentiment is Positive. The current price of 169.52 is below the 20-day moving average (MA) of 171.45, above the 50-day MA of 158.28, and above the 200-day MA of 117.56, indicating a neutral trend. The MACD of 0.92 indicates Positive momentum. The RSI at 51.32 is Neutral, neither overbought nor oversold. The STOCH value of 70.19 is Neutral, 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
HMM.A	76 Outperform	C$131.36M	7.37	14.23%	0.53%	12.69%	-7.21%
HPS.A	70 Outperform	C$2.02B	25.00	25.65%	0.65%	11.19%	19.13%
ELVA	69 Neutral	C$310.74M	165.15	8.02%	―	17.08%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GRID	60 Neutral	C$212.94M	-92.83	-13.77%	―	26.28%	27.86%
LPS	47 Neutral	C$19.86M	-4.83	-341.84%	―	27.76%	-0.37%
EXRO	40 Neutral	―	―	-405.71%	―	163.76%	-113.54%

Hammond Power Solutions Corporate Events

Hammond Power Solutions Declares Quarterly Dividend

Hammond Power Solutions Inc. has announced a quarterly cash dividend of $0.275 per Class A and Class B share, payable on December 18, 2025, to shareholders on record as of December 11, 2025. This dividend declaration reflects the company’s commitment to returning value to its shareholders and may enhance its attractiveness to investors, potentially impacting its market position positively.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$206.00 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 Growth Amid Profit Challenges

The recent earnings call for Hammond Power Solutions (OTC) highlighted a mixed sentiment, with strong revenue growth and a significant backlog increase being overshadowed by challenges in profitability. The company expressed optimism for future quarters, but current margin pressures and economic uncertainties in certain markets remain significant hurdles.

Hammond Power Solutions Sees Strong Q3 2025 Growth Amid Market Challenges

Hammond Power Solutions reported a strong third quarter in 2025, with sales reaching $218 million, marking a 13.7% increase compared to the same period in 2024. The company experienced significant growth in the U.S. market, particularly in private label and distribution channels, despite facing challenges such as material cost inflation and tariffs. The backlog increased by 27.7% since the beginning of the year, with substantial orders from data centers expected to be fulfilled primarily in 2026 from their new facilities in Mexico. This growth trajectory is supported by strategic pricing actions and capital investments to accommodate the rising demand.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$156.00 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 to Announce Q3 2025 Financial Results

Hammond Power Solutions Inc. announced it will release its third-quarter financial results for 2025 on October 23, after market close, followed by a conference call and webcast on October 24. This announcement is significant for stakeholders as it provides insights into the company’s financial health and operational performance, potentially impacting its industry positioning and investor relations.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$129.00 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 Recognized in 2025 TSX30 Ranking

Hammond Power Solutions has been recognized in the 2025 TSX30 ranking, which highlights the top-performing companies on the Toronto Stock Exchange. This inclusion signifies the company’s successful execution of its mission to simplify electrification and underscores its strong market positioning and growth trajectory.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$144.00 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 Addresses Impact of U.S. Tariff Changes

Hammond Power Solutions Inc. has announced that the recently expanded U.S. tariffs on steel and aluminum derivative products will affect certain materials and components in its products. The company believes these tariffs will have a uniform impact across the industry and plans to work with customers and suppliers to manage the additional costs. Despite potential short-term implications, HPS does not expect a material impact on its business and remains focused on its long-term strategy to grow market share in the U.S. and select global markets.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$144.00 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 Declares Quarterly Dividend

Hammond Power Solutions Inc. announced a quarterly cash dividend of $0.275 per Class A Subordinate Voting Share and Class B Common Share, payable on September 25, 2025, to shareholders of record as of September 18, 2025. This dividend is designated as an ‘eligible dividend’ for Canadian income tax purposes, which may have implications for shareholders’ tax situations.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$144.00 price target. To see the full list of analyst forecasts on Hammond Power Solutions stock, see the TSE:HPS.A Stock Forecast page.