TSE:HPS.A
Hammond Power Solutions Inc. (HPS.A.TO)
Financials 
Technical Analysis 
Sep 11, 2026, 12:00 amThis summary was created by AI, based on 10 opinions in the last 12 months.
Hammond Power Solutions Inc. (HPS.A-T) has captured the attention of various analysts, especially in light of the increasing demand for energy solutions tied to advancements like AI and the electrification of the economy. The company specializes in manufacturing transformers and energy transformers crucial for data centers, positioning it favorably for growth amidst significant infrastructure builds. Recent performance indicators show a strong backlog growth of 122% year-over-year, and the stock price has seen new highs and excellent momentum. However, some experts caution about the volatility around earnings announcements and the current overbought status of the stock. While the fundamentals are promising, there are concerns about rising input costs and supply chain disruptions impacting profit margins, making it vital for investors to carefully consider entry points.
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Premium contentWe reiterate this electric transformer manufacturer, involved in data centre and cloud projects, as a TOP PICK. Recently reported earnings showed a 5% increase in year on year sales and a 17% increase in backlog of orders, which is great timing considering their new production factory is expected to open sooner than expected. It trades at 14x earnings, 3x book and supports a robust 31% ROE. We recommend trailing up the stop (from $70) to $80, looking to achieve $131 -- upside potential of 28%. Yield 1.1%
(Analysts’ price target is $148.25)Premium contentHPS manufacturers electrical transformers such as those used in data centres with plants in Canada, the US, Mexico and India. Recently reported earnings showed record sales with 11% growth over the yar. It trades at 15x earnings, 3.5x book and supports a ROE of 26%. We recommend setting a stop-loss at $70, looking to achieve $119 -- upside potential of 28%. Yield 1.2%.
(Analysts’ price target is $160.50)
Still owned by founder, second generation. Has done the same thing for a long time; what changed is number of places they could sell to. Good business, but not a great price right now.
DeepSeek was like a "man overboard" moment for a stock like this, as many own it simply as a beneficiary of data centre buildout. This sentiment makes it harder for the long-term investor.
Premium contentOur PAST TOP PICK with HPS.A has triggered its stop at $127. To remain disciplined, we recommend covering the position at this time. When combined with our previous guidance, this will result in a net investment gain of 21%
Exposed to the right verticals. One of the very few pure-plays in Canada. Management's been great. Stock has benefited from pickup in demand. But is it sustainable? Margins can't remain elevated forever. Power demand is real. Given the runup, be careful.
Hold, or reduce on strength. Better ways to get exposure.
Premium contentRecently reported earnings for HPS.A showed record margins, increased revenues and a growing order backlog. Healthcare and data centre infrastructure projects are growing well for this manufacturer of electric transformers. We like that cash reserves are growing, while debt is retired. It supports a 27% ROE. We recommend trailing up the stop (from $115) to $127 at this time, looking to achieve $166 -- upside potential of 22%. Yield 0.7%
(Analysts’ price target is $165.67)
Premium contentPremium contentDry transformers. Spending fair bit of money to ramp up production and capabilities. Strong balance sheet. Data centres are going to use a lot of power, so the story will continue. Trades ~10x EBITDA, but growing at really high teens multiples for revenue and EBITDA. Yield is 0.8%.
(Analysts’ price target is $165.00)
Bruce Campbell (2)Premium contentWe reiterate this producer of electric transformers as a TOP PICK. Management announced an acceleration of capital deployment, supporting the trend for growing demand for its products. We like that cash reserves are growing, while debt is reduced. It trades at 20x earnings and supports a 28% ROE. We recommend trailing up the stop (from $75) to $95, looking to achieve $146 -- upside potential of 28%. Yield 0.6%
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Our PAST TOP PICK with HPS.A is progressing well. To remain disciplined, we recommend trailing up the stop (from $80) to $102 at this time.