The addressable market must be growing as everything electrifies - do you think they'll acquire / be acquired? I see it is trading near its 52 week PE high, but is there an argument it is still undervalued? Could this ever be a $5 billon market cap company? Debt seems low. Do you know much about management? Do they ever issue shares (or follow that CSU model of never issuing).
Thanks in advance. - Jeff
It is true that despite decent growth recently, HPS.A is still only trading at 14.8x Forward P/E, still cheap for a double-digit growth company. Based on consensus estimates, sales are expected to grow by roughly 8% over the next few years (but 26% in 2023 expected).
HPS.A is still relatively 'unknown' name among institutional investors, and the market cap is still quite small. HPS.A does issue shares occasionally, but they control the share count well. HPS.A’s management has been committed to grow organically through internal R&D (unlike CSU, where growth was driven mainly by acquisitions), and there were only some minor acquisitions over the years, largely for intellectual properties. Overall, strong organic growth, cheap valuation, healthy runway for growth, and strong momentum we would not have much issue with HPS here. We might not compare it to a CSU and our one caution here is that there is some cyclicality to their business, so while te valuation looks fine, these names tend to trade at lower valuations in general.