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Hammond Power Solutions
(TSX:HPS.A)
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Rating:61Neutral
Price Target:
C$264.00
▲(9.84% Upside)
Action:Reiterated
Date:08/01/26
The score is driven primarily by solid underlying business growth and balance-sheet strength, but tempered by materially weaker TTM cash flow and margin compression. The latest earnings call was constructive (record sales, strong backlog, improving adjusted profitability), while technicals are currently weak versus key moving averages and valuation is expensive with a low yield.
Positive Factors
Strong demand and backlog
Record sales and a nearly doubled backlog indicate strong customer demand and provide multi-month revenue visibility. Data-center exposure also links growth to durable electrification and infrastructure investment.
Negative Factors
Weak recent cash generation
The sharp deterioration in cash conversion suggests working-capital needs or reinvestment are absorbing earnings. If sustained during expansion and acquisition integration, HPS may rely more heavily on balance-sheet capacity.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong demand and backlog
Record sales and a nearly doubled backlog indicate strong customer demand and provide multi-month revenue visibility. Data-center exposure also links growth to durable electrification and infrastructure investment.
Read all positive factors
Hammond Power Solutions (HPS.A) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.88B
Dividend Yield0.44%
Average Volume (3M)68.70K
Price to Earnings (P/E)47.9
Beta (1Y)1.36
Revenue Growth28.54%
EPS Growth-22.60%
CountryCA
Employees2,121
SectorIndustrials
Sector Strength72
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)5.17
Shares Outstanding9,126,624
10 Day Avg. Volume67,082
30 Day Avg. Volume68,699
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$373.33Price Target Upside55.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)10.21
Revenue Forecast (FY)C$1.41B
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 makes money mainly by designing, manufacturing, and selling transformers and related electrical power products to customers through a mix of direct sales and channel partners (e.g., electrical distributors and OEM relations...
Hammond Power Solutions Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call highlighted strong operational execution and significant top-line and adjusted operating performance improvements: record quarterly sales (+44.7% YoY), backlog nearly doubled YoY (+96.9%), adjusted EBITDA and adjusted EPS materially improved. Key strategic milestones include the full ramp of the Mexico MON IV facility and the close of the AEG acquisition, which broadens product, service and geographic exposure. Lowlights were smaller in scope relative to the positives and focused on near-term items: reported net earnings were lower due to acquisition and FX charges, Canada experienced a notable sales decline (-23.7% YoY), tariffs/input-costs and competitive pricing dynamics persist, and net debt rose modestly to $36M. Overall, the positive operational momentum, backlog strength, margin and adjusted EPS gains, and strategic acquisition outweigh the near-term challenges and integration costs.Positive Updates
Record Quarterly Sales
Sales of $324.8 million in Q2 2026, up 44.7% year-over-year (from $224.0M in Q2 2025); sequential revenue increased by ~$16M.
Negative Updates
Reported Net Earnings Decline
Reported net earnings were $9.4 million in Q2 2026 versus $13.4 million in Q2 2025 (down ~$4.0M), reflecting acquisition-related costs, foreign exchange losses, and higher share-based compensation.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Sales
Sales of $324.8 million in Q2 2026, up 44.7% year-over-year (from $224.0M in Q2 2025); sequential revenue increased by ~$16M.
Read all positive updates
Company Guidance
Guidance: HPS said it enters the second half from a position of strength and will prioritize converting backlog into shipments, maintaining strong operational execution, managing working capital, evaluating manufacturing footprint and integrating AEG (closed June 29; FY2025 revenue ~€326M; Q3 will include a full quarter of AEG results). Key metrics cited: Q2 record sales $324.8M (up 44.7% YoY from $224.0M and ~+$16M sequentially; annualized ≈ $1.3B, which management noted as the current facility “high watermark”), backlog down 6.9% sequentially but up 96.9% YoY, U.S./Mexico sales +73% YoY while Canada was down 23.7% YoY, data centers now account for just over 30% of revenue, gross margin 31.5% (vs 30.1% in Q1 2026 and 32.7% in Q2 2025), adjusted EBITDA $53.2M (16.4% of sales vs $33.4M or 14.9% last year), reported net earnings $9.4M (vs $13.4M LY) with adjusted EPS $2.76 (vs $1.72 LY), net debt ~$36M at quarter end, working capital as a % of sales improved from Q1, MON IV is fully ramped (MON III improving), modest incremental site expansions in the “tens of millions” are being pursued, and pricing plus operational levers are being used to offset tariffs and input‑cost pressure.Hammond Power Solutions Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.06B | 898.25M | 788.34M | 710.06M | 558.46M | 380.20M |
| Gross Profit | 322.05M | 271.07M | 258.28M | 231.01M | 165.19M | 102.43M |
| EBITDA | 121.49M | 124.47M | 112.69M | 96.00M | 69.74M | 30.05M |
| Net Income | 61.60M | 72.24M | 71.53M | 63.40M | 44.83M | 15.18M |
Balance Sheet | ||||||
| Total Assets | 680.40M | 598.92M | 493.14M | 408.34M | 302.67M | 235.10M |
| Cash, Cash Equivalents and Short-Term Investments | 33.63M | 40.91M | 34.09M | 52.59M | 28.13M | 20.91M |
| Total Debt | 94.75M | 81.42M | 36.23M | 37.03M | 17.59M | 28.14M |
| Total Liabilities | 294.77M | 246.86M | 185.10M | 177.97M | 125.78M | 109.10M |
| Stockholders Equity | 385.62M | 352.06M | 308.04M | 230.38M | 176.89M | 126.00M |
Cash Flow | ||||||
| Free Cash Flow | -696.00K | -12.48M | 24.05M | 23.55M | 27.68M | 14.38M |
| Operating Cash Flow | 30.08M | 23.07M | 64.75M | 44.11M | 37.01M | 20.45M |
| Investing Cash Flow | -34.10M | -38.85M | -62.98M | -19.36M | -12.67M | -10.91M |
| Financing Cash Flow | 9.55M | 24.41M | -24.21M | 755.00K | -22.30M | -4.26M |
Hammond Power Solutions Technical Analysis
Positive
240.36
Price Trends
272.33
Negative
288.49
Negative
234.93
Positive
Market Momentum
-9.77
Negative
48.60
Neutral
64.14
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 240.36 is below the 20-day moving average (MA) of 244.82, below the 50-day MA of 272.33, and above the 200-day MA of 234.93, indicating a neutral trend. The MACD of -9.77 indicates Negative momentum. The RSI at 48.60 is Neutral, neither overbought nor oversold. The STOCH value of 64.14 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$305.57M | 16.65 | 13.55% | 0.22% | 15.54% | 3.43% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | C$2.88B | 47.86 | 16.96% | 0.44% | 28.54% | -22.60% | |
55 Neutral | C$223.31M | -201.97 | -5.42% | ― | 20.11% | 55.61% | |
52 Neutral | C$476.99M | 72.37 | 7.92% | ― | 29.42% | 247.98% | |
50 Neutral | C$31.28M | -14.93 | 6067.59% | ― | 0.60% | 50.19% | |
41 Neutral | C$3.98M | -0.88 | 11.91% | ― | -20.21% | 57.49% |
* Industrials Sector Average
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Hammond Power Solutions Corporate Events
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.