Hammond Power Solutions (HPS.A) AI Stock Analysis

• Market Cap: C$2.19B
• Dividend Yield: 0.69%
• Average Volume (3M): 53.75K
• Price to Earnings (P/E): 27.1
• Beta (1Y): 1.99
• 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: 46,552
• 30 Day Avg. Volume: 53,747
• 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: 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: 67 Neutral
• Price Target: C$200.00 ▲(14.96% Upside)

Hammond Power Solutions' overall stock score is driven by strong financial performance and positive earnings call insights, despite challenges in cash flow and valuation concerns. The technical analysis suggests potential short-term weakness, while the valuation indicates the stock may be overvalued.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for the company's products, particularly in the U.S., enhancing its market position and supporting long-term financial health.

Market Expansion

Increasing manufacturing capacity positions the company to meet future demand, supporting growth and competitive advantage in the electrical equipment industry.

Strong Backlog

A significant backlog ensures future revenue streams and reflects strong demand, particularly in the U.S., enhancing the company's market stability and growth prospects.

Negative Factors

Profitability Decline

Declining profitability due to material cost pressures and overheads can strain financial performance, affecting long-term margins and investment capacity.

Impact of Tariffs

Tariff impacts on key materials can increase costs and reduce margins, posing a risk to profitability and competitive pricing in the global market.

Cash Flow Challenges

Significant decline in free cash flow due to increased capital expenditures may limit liquidity and financial flexibility, impacting the company's ability to invest in growth opportunities.

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 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 performance with robust revenue and profit growth, supported by efficient operations and a solid balance sheet. However, the decline in free cash flow and increased debt levels require attention.

Income Statement

Hammond Power Solutions has demonstrated strong revenue growth with a 3.19% increase in TTM, supported by healthy gross and net profit margins at 32.11% and 9.63% respectively. The EBIT and EBITDA margins are also robust at 13.25% and 15.18%, indicating efficient operational management. The consistent upward trajectory in revenue and profitability metrics highlights the company's strong market position and operational efficiency.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.20, reflecting prudent financial leverage. The return on equity is strong at 25.79%, showcasing effective use of shareholder funds. The equity ratio stands at 59.06%, indicating a stable financial structure. However, the increase in total debt over the periods suggests a need for careful monitoring of leverage levels.

Cash Flow

The cash flow statement reveals a concerning decline in free cash flow, with a negative growth rate of 230.94% in TTM, primarily due to increased capital expenditures. The operating cash flow to net income ratio is low at 0.20, indicating potential liquidity constraints. Despite these challenges, the company has previously demonstrated strong free cash flow to net income ratios, suggesting potential for recovery.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	852.64M	788.34M	710.06M	558.46M	380.20M	322.10M
Gross Profit	266.10M	258.28M	231.01M	165.19M	102.43M	86.99M
EBITDA	126.91M	112.69M	96.00M	69.74M	30.05M	29.48M
Net Income	80.72M	71.53M	63.40M	44.83M	15.18M	14.06M
Balance Sheet
Total Assets	583.72M	493.14M	408.34M	302.67M	235.10M	189.39M
Cash, Cash Equivalents and Short-Term Investments	38.50M	34.09M	52.59M	28.13M	20.91M	14.79M
Total Debt	92.62M	36.23M	37.03M	17.59M	28.14M	25.39M
Total Liabilities	238.92M	185.10M	177.97M	125.78M	109.10M	75.48M
Stockholders Equity	344.80M	308.04M	230.38M	176.89M	126.00M	113.92M
Cash Flow
Free Cash Flow	-20.29M	24.05M	23.55M	27.68M	14.38M	14.75M
Operating Cash Flow	16.52M	64.75M	44.11M	37.01M	20.45M	19.68M
Investing Cash Flow	-59.33M	-62.98M	-19.36M	-12.67M	-10.91M	-4.75M
Financing Cash Flow	30.44M	-24.21M	755.00K	-22.30M	-4.26M	-24.18M

Hammond Power Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 173.97
• 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 173.97 is above the 20-day moving average (MA) of 168.04, above the 50-day MA of 167.66, and above the 200-day MA of 135.56, indicating a bullish trend. The MACD of 5.02 indicates Negative momentum. The RSI at 73.40 is Negative, neither overbought nor oversold. The STOCH value of 90.66 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
HMM.A	76 Outperform	C$113.34M	6.56	14.23%	0.54%	12.69%	-7.21%
HPS.A	67 Neutral	C$2.19B	27.10	25.65%	0.69%	11.19%	19.13%
ELVA	64 Neutral	C$728.86M	137.26	16.94%	―	46.80%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GRID	57 Neutral	C$297.88M	-223.17	-13.77%	―	26.28%	27.86%
LPS	42 Neutral	C$14.90M	-4.58	-341.84%	―	27.76%	-0.37%
EGT	40 Underperform	C$4.52M	-0.42	―	―	―	―

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.