Hammond Power Solutions Inc. Fundamental Analysis (TSX: HPS-A.TO)
Hammond Power Solutions Inc. Fundamental Analysis (TSX: HPS-A.TO)
Hammond Power Solutions Inc. (TSX: HPS-A.TO) shows moderate financial fundamentals with a PE ratio of 49.73, profit margin of 6.82%, and ROE of 18.82%. The company generates $1.0B in annual revenue with strong year-over-year growth of 13.94%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 65.0/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze HPS-A.TO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentHPS-A.TO demonstrates superior asset utilization.
Valuation Score
ModerateHPS-A.TO shows balanced valuation metrics.
Growth Score
ModerateHPS-A.TO shows steady but slowing expansion.
Financial Health Score
ExcellentHPS-A.TO maintains a strong and stable balance sheet.
Profitability Score
ModerateHPS-A.TO maintains healthy but balanced margins.
Key Financial Metrics
Is HPS-A.TO Expensive or Cheap?
P/E Ratio
HPS-A.TO trades at 49.73 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HPS-A.TO's PEG of -1.84 indicates potential undervaluation.
Price to Book
The market values Hammond Power Solutions Inc. at 8.80 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 27.71 times EBITDA. This signals the market has high growth expectations.
How Well Does HPS-A.TO Make Money?
Net Profit Margin
For every $100 in sales, Hammond Power Solutions Inc. keeps $6.82 as profit after all expenses.
Operating Margin
Core operations generate 9.96 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.82 in profit for every $100 of shareholder equity.
ROA
Hammond Power Solutions Inc. generates $10.39 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Hammond Power Solutions Inc. generates limited operating cash flow of $37.99M, signaling weaker underlying cash strength.
Free Cash Flow
Hammond Power Solutions Inc. generates weak or negative free cash flow of $1.74M, restricting financial flexibility.
FCF Per Share
Each share generates $0.15 in free cash annually.
FCF Yield
HPS-A.TO converts 0.05% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
49.73
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.84
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.80
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.39
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.22
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.82
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.25
vs 25 benchmark
How HPS-A.TO Stacks Against Its Sector Peers
| Metric | HPS-A.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 49.73 | 30.52 | Worse (Expensive) |
| ROE | 18.82% | 1172.00% | Weak |
| Net Margin | 6.82% | -20786.00% (disorted) | Weak |
| Debt/Equity | 0.22 | 0.38 | Strong (Low Leverage) |
| Current Ratio | 1.82 | 24.22 | Neutral |
| ROA | 10.39% | -1311221.00% (disorted) | Strong |
HPS-A.TO outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Hammond Power Solutions Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
175.13%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
406.83%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
15.64%
Industry Style: Cyclical, Value, Infrastructure
High Growth