Hipages Group Holdings Ltd (ASX:HPG) shares surged 25% to a six-month high of $1.36 after delivering a stronger-than-expected earnings result and upbeat guidance that E&P’s Olivier Coulon said shows the stock remains undervalued.
Adjusted net profit for FY25 came in at $2.4 million, 38% above his forecast, while free cash flow of $5.6 million exceeded estimates by 12.1%.
At the mid-point, guidance points to revenue of $92.3 million, earnings before interest, taxes, depreciation and amortisation (EBITDA) of $23.1 million and free cash flow of $9 million — all ahead of consensus forecasts of $91.8 million, $22.4 million and $7.9 million respectively.
“At the guidance mid-point HPG trades on 5.1x EV/EBITDA and 13x free cash flow,” Coulon said. “We maintain this is far too cheap for a business generating double digit topline growth, expanding margins and growing capitalised spend slower than EBITDA. We’d expect the stock to perform well today.”
HPG was last trading 21% higher at $1.32.