Hammond Power Solutions (HPS.A) AI Stock Analysis

• Market Cap: $1.45B
• Dividend Yield: 0.91%
• Average Volume (3M): 58.39K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 1.69
• Revenue Growth: 9.53%
• EPS Growth: 20.80%
• Country: CA
• Employees: 2,121
• Sector: Industrials
• Sector Strength: 73
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.12
• Shares Outstanding: 9,126,624
• 10 Day Avg. Volume: 30,386
• 30 Day Avg. Volume: 58,391
• 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: 1.01
• Enterprise Value/Revenue: 1.77
• Enterprise Value/Gross Profit: 5.52
• Enterprise Value/Ebitda: 11.68
• 1Y Price Target: $140.00
• Price Target Upside: 14.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 73 Outperform
• Price Target: C$144.00 ▲(17.52% Upside)

Hammond Power Solutions demonstrates strong financial performance and positive earnings call highlights, driving the overall score. However, technical indicators and valuation metrics suggest moderate caution due to potential cost pressures and low dividend yield.

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 sale of its electrical transformers and related products, which are essential components in the distribution and management of electrical power. Key revenue streams include standard transformer sales, custom transformer solutions, and aftermarket services, such as maintenance and support. The company benefits from strategic partnerships with distributors and suppliers, which enhance its market reach and provide access to a broader customer base. Additionally, HPS capitalizes on the growing demand for energy-efficient solutions and renewable energy applications, positioning itself to capture emerging market opportunities.

Hammond Power Solutions Financial Statement Overview

Summary

Hammond Power Solutions shows strong financial health with significant revenue growth and robust profitability metrics. The balance sheet demonstrates low leverage and a strong equity base, though a decline in free cash flow growth indicates potential liquidity concerns.

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	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	29.33M
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	28.76M	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: 122.53
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 122.53 is below the 20-day moving average (MA) of 122.90, below the 50-day MA of 124.48, and above the 200-day MA of 108.41, indicating a neutral trend. The MACD of -1.19 indicates Positive momentum. The RSI at 50.74 is Neutral, neither overbought nor oversold. The STOCH value of 88.22 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	73 Outperform	$1.45B	18.18	26.34%	0.91%	9.53%	20.80%
Sector *	64 Neutral	$10.75B	15.58	7.62%	2.01%	2.80%	-14.32%
ELVA	―	$247.61M	221.15	8.02%	―	―	―
HMM.A	69 Neutral	C$103.82M	5.82	15.17%	0.66%	11.45%	-2.19%
LPS	47 Neutral	C$17.02M	―	-341.84%	―	27.76%	-0.37%
EXROF	―	$6.21M	―	-405.71%	―	―	―
GRID	45 Neutral	C$152.20M	―	-26.19%	―	24.53%	7.85%

Hammond Power Solutions Corporate Events

Hammond Power Solutions Achieves Record Sales in Q2 2025 Amid Cost Challenges

Hammond Power Solutions reported record sales of $224 million in Q2 2025, a 13.8% increase from the previous year, despite facing cost headwinds. The company’s gross margin decreased due to rising input costs and investments in new facilities, such as the new production site in Mexico. The U.S. market showed significant growth, particularly in private label channels, while the Canadian market expanded through distribution channels in sectors like EV charging and data centers. Despite a decrease in backlog from Q1 2025, it remains higher than the end of 2024. The company’s financial performance reflects strategic expansions and market adaptations, although challenges in supply chain and inflation impacted margins.

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 to Announce Q2 2025 Financial Results

Hammond Power Solutions Inc. announced it will release its second-quarter financial results for 2025 on July 24, with a conference call and webcast scheduled for July 25. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic positioning in the electrification industry.

The most recent analyst rating on ($TSE:HPS.A) stock is a Buy with a C$140.00 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 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.