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Hammond Power Solutions
(TSX:HPS.A)
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Rating:60Neutral
Price Target:
C$241.00
▲(0.27% Upside)
Action:Reiterated
Date:10/31/26
The score reflects solid underlying business performance and a positive earnings-call backdrop (record results, margin improvement, and cash generation), tempered by higher balance-sheet leverage and uneven cash flow. Technicals are currently weak (below key moving averages with negative MACD), and the stock’s valuation is expensive (high P/E with low yield), which together cap the overall rating.
Positive Factors
Strong revenue growth and market expansion
Rapid sales growth across North American markets indicates strong product demand and expanding customer penetration. Exposure to data centers, industrial, infrastructure, energy, and technology markets broadens the growth base and supports continued scale over the next several quarters.
Negative Factors
Sharp increase in leverage and financing costs
The acquisition-related debt increase materially reduces financial flexibility compared with the historically conservative balance sheet. Higher interest expense can absorb operating cash flow and constrain investment capacity, while greater leverage raises sensitivity to weaker demand or margin pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue growth and market expansion
Rapid sales growth across North American markets indicates strong product demand and expanding customer penetration. Exposure to data centers, industrial, infrastructure, energy, and technology markets broadens the growth base and supports continued scale over the next several quarters.
Read all positive factors
Hammond Power Solutions (HPS.A) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.74B
Dividend Yield0.49%
Average Volume (3M)73.76K
Price to Earnings (P/E)62.0
Beta (1Y)0.91
Revenue Growth51.29%
EPS Growth-10.97%
CountryCA
Employees2,121
SectorIndustrials
Sector Strength72
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)3.71
Shares Outstanding9,126,624
10 Day Avg. Volume86,040
30 Day Avg. Volume73,761
Financial Highlights & Ratios
PEG Ratio26.32
Price to Book (P/B)5.39
Price to Sales (P/S)2.11
P/FCF Ratio-152.08
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$382.50Price Target Upside59.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)10.2
Revenue Forecast (FY)C$1.40B
Hammond Power Solutions Business Overview & Revenue Model
Company Description
Hammond Power Solutions Inc. (HPS) specializes in the engineering, manufacturing, and sale of a broad spectrum of electrical power products. Their portfolio includes tailored magnetic components, alongside a comprehensive range of standard dry-typ...
How the Company Makes Money
Hammond Power Solutions primarily makes money by selling power equipment—most notably dry-type transformers—into a range of end markets that require electrical distribution and voltage conversion. Revenue is generated through (1) product sales of ...
Hammond Power Solutions Earnings Call Summary
Earnings Call Date:Oct 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Mar 04, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall, supported by record sales, substantial year-over-year growth, improving gross and EBITDA margins, strong cash generation, successful capacity expansion, and positive early integration and customer interest in AEG. The company also acknowledged challenges in Canada, softer AEG product activity, project timing variability, acquisition-related costs, higher interest expense, and commodity and tariff pressures.Positive Updates
Record Quarterly Sales and Profitability
HPS reported a record third quarter with consolidated sales of $446.3 million, more than double the third quarter of last year, adjusted EBITDA of $84 million, and adjusted earnings per share of $3.13. Year-to-date sales surpassed $1 billion, reaching $1.04 billion through the first nine months.
Negative Updates
Challenging Canadian Market
Management described Canada as a more challenging environment, with slower market activity and more competitive pricing. Canada sales were $57.6 million, up 12.1% year over year as certain large custom project orders were completed, but the year-to-date decline narrowed only to 3.7%.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Quarterly Sales and Profitability
HPS reported a record third quarter with consolidated sales of $446.3 million, more than double the third quarter of last year, adjusted EBITDA of $84 million, and adjusted earnings per share of $3.13. Year-to-date sales surpassed $1 billion, reaching $1.04 billion through the first nine months.
Read all positive updates
Company Guidance
Management said power magnetics capacity is “sort of that $1.4 billion to $1.45 billion in the near term,” with Fort Worth adding an additional $250 million of capacity and expected to start ramping “in Q4 and Q1 of 2028”; it believes it can manage business growth until Fort Worth is operating, while operating leverage can sustain margins “provided the volume stays.” Backlog is “roughly 2 to 3 quarters on average of business,” typically providing visibility into Q1 and “kind of Q2,” while AEG bookings are expected to increase in 2027, with North American revenue potentially emerging “late '27, into '28 and '29.”Hammond Power Solutions Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
58
Neutral
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.29B | 898.25M | 788.34M | 710.06M | 558.46M | 380.20M |
| Gross Profit | 409.72M | 271.07M | 258.28M | 231.01M | 165.19M | 102.43M |
| EBITDA | 159.58M | 124.47M | 112.69M | 96.00M | 69.74M | 30.05M |
| Net Income | 71.86M | 72.24M | 71.53M | 63.40M | 44.83M | 15.18M |
Balance Sheet | ||||||
| Total Assets | 1.34B | 598.92M | 493.14M | 408.34M | 302.67M | 235.10M |
| Cash, Cash Equivalents and Short-Term Investments | 133.96M | 40.91M | 34.09M | 52.59M | 28.13M | 20.91M |
| Total Debt | 545.67M | 81.42M | 36.23M | 37.03M | 17.59M | 28.14M |
| Total Liabilities | 930.21M | 246.86M | 185.10M | 177.97M | 125.78M | 109.10M |
| Stockholders Equity | 409.28M | 352.06M | 308.04M | 230.38M | 176.89M | 126.00M |
Cash Flow | ||||||
| Free Cash Flow | 77.16M | -12.48M | 24.05M | 23.55M | 27.68M | 14.38M |
| Operating Cash Flow | 109.10M | 23.07M | 64.75M | 44.11M | 37.01M | 20.45M |
| Investing Cash Flow | -344.63M | -38.85M | -62.98M | -19.36M | -12.67M | -10.91M |
| Financing Cash Flow | 330.82M | 24.41M | -24.21M | 755.00K | -22.30M | -4.26M |
Hammond Power Solutions Technical Analysis
Negative
240.36
Price Trends
253.53
Negative
273.54
Negative
251.94
Negative
Market Momentum
-9.13
Positive
41.62
Neutral
71.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HPS.A, the sentiment is Negative. The current price of 240.36 is below the 20-day moving average (MA) of 258.68, below the 50-day MA of 253.53, and below the 200-day MA of 251.94, indicating a bearish trend. The MACD of -9.13 indicates Positive momentum. The RSI at 41.62 is Neutral, neither overbought nor oversold. The STOCH value of 71.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:HPS.A.
Hammond Power Solutions Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$294.58M | 16.04 | 13.55% | 0.23% | 15.54% | 3.43% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | C$2.74B | 61.96 | 18.94% | 0.49% | 51.29% | -10.97% | |
55 Neutral | C$239.26M | -217.81 | -5.42% | ― | 20.11% | 55.61% | |
52 Neutral | C$365.99M | 53.44 | 7.92% | ― | 29.42% | 247.98% | |
41 Neutral | C$3.98M | -1.04 | 9.87% | ― | ― | ― | |
41 Neutral | C$15.64M | -7.46 | 6067.59% | ― | 0.60% | 50.19% |
* Industrials Sector Average
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Hammond Power Solutions Corporate Events
Financial Disclosures
Hammond Power Solutions Sets Date for Q3 2026 Results and Investor Call
Neutral
Oct 23, 2026
Hammond Power Solutions Inc. will release its financial results for the third quarter ended September 26, 2026, after markets close on October 29, 2026. The company will follow the results publication with a conference call and webcast for investo...
Business Operations and StrategyExecutive/Board Changes
Hammond Power Solutions Accelerates Board Transition as Lead Director Retires
Neutral
Oct 19, 2026
Hammond Power Solutions Inc. said Lead Director Fred Jaques will retire from its board on November 3, 2026, earlier than planned, due to an unforeseen family matter. Jaques, who has served for 12 years, is credited with strengthening corporate gov...
Business Operations and StrategyExecutive/Board Changes
Hammond Power Solutions Adds Veteran Industrial Executive to Board
Positive
Oct 1, 2026
Hammond Power Solutions Inc., a global manufacturer of dry‑type transformers, power electronics and other power conversion, distribution and quality solutions, serves critical electrical infrastructure and industrial customers from plants in...
Business Operations and Strategy
Hammond Power Solutions Secures Spot in 2026 TSX30 for Third Consecutive Year
Positive
Sep 9, 2026
Hammond Power Solutions Inc., a major player in dry-type transformers and power quality solutions, supports electrification across a wide range of end-user applications in electrical distribution networks. With manufacturing operations spanning No...
Dividends
Hammond Power Solutions Raises Quarterly Dividend by 5.5%
Positive
Sep 1, 2026
Hammond Power Solutions Inc. has increased its quarterly cash dividend to $0.29 per Class A Subordinate Voting Share and Class B Common Share, a 5.5% rise that reflects management’s confidence in the company’s financial position and ca...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Strategem Capital Lifts NAV, Restores TSX-V Compliance
Positive
Jul 31, 2026
Strategem Capital reported a rise in net asset value per share to $1.39 as of June 30, 2026, up from $1.19 at year-end 2025, despite its shares last trading at $0.89. The company has deployed 98% of its capital into short-term investments, generat...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.