Hammond Power Solutions (HPS.A) AI Stock Analysis

• Market Cap: C$1.12B
• Dividend Yield: 1.18%
• Average Volume (3M): 61.67K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 1.45
• Revenue Growth: 11.02%
• EPS Growth: 12.83%
• Country: CA
• Employees: 2,121
• Sector: Industrials
• Sector Strength: 78
• Industry: Electrical Equipment & Parts
• EPS (TTM): 6.01
• Shares Outstanding: 9,126,624
• 10 Day Avg. Volume: 49,446
• 30 Day Avg. Volume: 61,671
• PEG Ratio: 1.22
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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$149.00
• Price Target Upside: 61.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Hammond Power Solutions demonstrates a solid financial performance with notable revenue and capacity growth. The stock's technical indicators show mixed momentum, suggesting potential caution in the near term. The company's reasonable valuation and positive earnings outlook, supported by strategic expansions and acquisitions, reinforce its investment appeal. Potential risks include market uncertainties and cost pressures, but the company's strategic positioning and financial health provide a stable foundation for future growth.

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 demonstrates solid financial health with strong growth and profitability indicators in the income statement. The balance sheet reflects a conservative financial strategy with low leverage and robust equity. Cash flow generation is robust, supporting sustainable operations and potential growth investments. Overall, the company is well-positioned within the industrial goods sector with a promising financial outlook.

Income Statement

Hammond Power Solutions shows robust growth in revenue and profitability. The TTM gross profit margin stands at 33.46%, and the net profit margin is 8.84%, indicating strong operational efficiency. Revenue has grown consistently, with a recent TTM increase of 8.0% from the previous year. EBIT and EBITDA margins are healthy at 12.22% and 13.80%, respectively, reflecting effective cost management and operational leverage.

Balance Sheet

The company's balance sheet is solid with a low debt-to-equity ratio of 0.14, indicating conservative leverage. Return on equity (ROE) is strong at 24.99%, demonstrating effective use of shareholder funds. The equity ratio is 59.68%, highlighting a stable capital structure with significant equity backing. The company maintains a healthy cash position with net debt being negative, providing financial flexibility.

Cash Flow

Cash flow statements reveal positive trends with a TTM free cash flow growth of 13.15%. The operating cash flow to net income ratio is 0.92, indicating strong cash generation relative to net income. Free cash flow to net income ratio is 0.39, suggesting a solid ability to reinvest in business operations while maintaining liquidity.

Breakdown
Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
710.06M	558.46M	380.20M	322.10M	358.78M
	Gross Profit
231.01M	165.19M	102.43M	86.99M	87.96M
	EBIT
86.72M	59.44M	23.15M	22.04M	20.54M
	EBITDA
96.00M	69.74M	30.05M	29.33M	24.86M
	Net Income Common Stockholders
63.40M	44.83M	15.18M	14.06M	11.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
52.59M	28.13M	20.91M	14.79M	23.37M
	Total Assets
408.34M	302.67M	235.10M	189.39M	214.95M
	Total Debt
37.03M	17.59M	28.76M	25.39M	44.10M
	Net Debt
-15.56M	-10.53M	7.85M	10.60M	20.73M
	Total Liabilities
177.97M	125.78M	109.10M	75.48M	105.19M
	Stockholders Equity
230.38M	176.89M	126.00M	113.92M	109.77M
Cash Flow		Free Cash Flow
23.55M	27.68M	14.38M	14.75M	13.80M
	Operating Cash Flow
44.11M	37.01M	20.45M	19.68M	17.81M
	Investing Cash Flow
-19.36M	-12.67M	-10.91M	-4.75M	-2.97M
	Financing Cash Flow
755.00K	-22.30M	-4.26M	-24.18M	-7.39M

Hammond Power Solutions Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 92.40
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Neutral. The current price of 92.4 is above the 20-day moving average (MA) of 82.95, above the 50-day MA of 82.50, and below the 200-day MA of 112.17, indicating a neutral trend. The MACD of 2.81 indicates Negative momentum. The RSI at 62.09 is Neutral, neither overbought nor oversold. The STOCH value of 91.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	C$1.12B	15.60	26.76%	1.18%	11.02%	12.83%
BDI	71 Outperform	C$545.76M	20.89	8.37%	1.61%	2.41%	-16.76%
RCH	67 Neutral	C$1.79B	21.28	9.08%	1.89%	4.21%	-18.67%
Sector *	64 Neutral	$4.28B	11.80	5.30%	250.74%	4.12%	-9.02%

Hammond Power Solutions Corporate Events

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.

Spark’s Take on TSE:HPS.A Stock

According to Spark, TipRanks’ AI Analyst, TSE:HPS.A is a Outperform.

Hammond Power Solutions has a strong financial performance with robust revenue growth and profitability, supported by strategic expansions and acquisitions. The stock’s technical indicators suggest mixed momentum, but the company’s reasonable valuation and positive earnings outlook reinforce its investment appeal. Potential risks include market uncertainties and input cost pressures, yet the company’s strategic positioning and financial health provide a stable foundation for future growth.

To see Spark’s full report on TSE:HPS.A stock, click here.

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.

Spark’s Take on TSE:HPS.A Stock

According to Spark, TipRanks’ AI Analyst, TSE:HPS.A is a Outperform.

Hammond Power Solutions is well-positioned with strong financial performance and strategic growth initiatives. While technical indicators suggest cautious optimism, the overall outlook is bolstered by sound valuation and positive earnings call highlights. Challenges such as increased costs and geopolitical uncertainties are present but are outweighed by the company’s strengths.

To see Spark’s full report on TSE:HPS.A stock, click here.

Hammond Power Solutions Announces Leadership Changes Amid Board Member Retirement

Hammond Power Solutions Inc. announced the early retirement of Grant Robinson from its board of directors due to health issues, effective March 25, 2025. Fred Jaques will take over as lead director, and the company plans to add two new independent directors at the upcoming shareholder meeting. This leadership change is significant for HPS as it continues to strengthen its board and maintain its strategic direction in the industry.

Hammond Power Solutions Achieves Record Sales in Q4 2024

Hammond Power Solutions reported record sales of $208 million for the fourth quarter of 2024, marking an 11.5% increase from the previous year, with significant growth in custom and configured products. Despite some late-year charges related to acquisitions and investments, the company achieved a record earnings per share of $1.99 for the quarter, reflecting strong operational performance and strategic capacity expansions that are expected to support continued growth into 2025.

Hammond Power Solutions to Announce Q4 and Year-End 2024 Financial Results

Hammond Power Solutions Inc. announced it will release its financial results for the fourth quarter and year ending December 31, 2024, on March 20, 2025. The company will follow this with a conference call and webcast on March 21, 2025, which may provide insights into its financial health and future strategies, potentially impacting stakeholders and its market positioning.

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 March 28, 2025, to shareholders recorded by March 21, 2025. This declaration underscores HPS’s commitment to returning value to its shareholders, reflecting its stable financial position and confidence in ongoing operations, while also providing important tax information for Canadian shareholders.