Q: Hello,
What key valuation metrics is Hammond Power trading at (PE, FCF yield, etc). What are the metrics after this huge run and will the growth ahead meet expectations?
Do you consider it a buy here after hitting its 50 day?
What key valuation metrics is Hammond Power trading at (PE, FCF yield, etc). What are the metrics after this huge run and will the growth ahead meet expectations?
Do you consider it a buy here after hitting its 50 day?
5i Research Answer:
We would look at forward P/E and forward EV/EBITDA to value HPS.A after the big run. Both metrics have come up considerably following the stock's impressive performance lately. Forward P/E is now sitting at 22.6x and forward EV/EBITDA is at 13.1x. While both metrics have crept into expensive territory, we think that HPS.A still has room to run and meet these growth expectations. We still consider it a buy, however there has been a bit of a selloff lately, not related to any company specific news. We would target the high $120s for a buy range following this sell off.