Hipages appears to be at a significant turning point, showing strong signs of operational and financial health

Hipages appears to be at a significant turning point, showing strong signs of operational and financial health after a period of strategic change. The key takeaway from the FY25 results is the successful execution of its transition from a simple marketplace to a more integrated Software-as-a-Service (SaaS) platform, which is now yielding positive results.

Hipages Group Holdings Ltd stocks in August, 2025 have started increasing and could the stock price currently at AUD $1.29 get back to AUD $4.10 of 10/09/2021?

Hipages Group Holdings Ltd Analysis of Business Performance and Strategy

Hipages Group Holdings Ltd is Australia and New Zealand's #1 platform connecting homeowners and tradies, with a strategic evolution from a marketplace to a Software-as-a-Service (SaaS) platform called Hipages tradiecore. This all-in-one platform integrates lead generation with job management, covering quoting, invoicing, scheduling, payments, and customer communications. The Group Holdings Ltd Holdings Ltd serves over 36,000 subscribed tradie businesses through its Australian (Hipages) and New Zealand (Builderscrack) platforms.

Hipages Group Holdings Ltd (ASX: HPG) appears to be at a significant turning point, showing strong signs of operational and financial health after a period of strategic change. The key takeaway from the FY25 results is the successful execution of its transition from a simple marketplace to a more integrated Software-as-a-Service (SaaS) platform, which is now yielding positive results.

Market Opportunity and Growth Potential

The Australian tradie market is valued at $141.8 billion, with residential homeowners comprising $54.3 billion of that.

Hipages targets approximately 175,000 tradie businesses, holding about 19% market penetration.

There is significant room for growth given the low penetration of specialised job management software among tradies (14% overall; only 8% for sole traders).

Key Strengths and Positive Indicators

Strong Financial Growth The company has achieved its FY25 guidance, showing a 10% increase in total revenue to $83.1 million and a significant 162% increase in Free Cash Flow (FCF) to $5.6 million. This demonstrates growing profitability and operational efficiency. The fact that 47 cents of every new dollar of revenue converted to free cash flow is a powerful indicator of a scalable and efficient business model.

Successful Strategic Shift

The migration of all Australian tradies to the new Single Tradie Platform (STP), known as 'Tradiecore', is a major accomplishment. This move to a SaaS model, which integrates job management with lead generation, increases the value proposition for tradies, which is expected to improve customer retention and create new revenue opportunities. The successful transition of the New Zealand business to a full subscription model further validates this strategy.

Growing Profitability and Margins

EBITDA is up 20% to $19.6 million, and the EBITDA margin has expanded to 24%. This shows the company isn't just growing its revenue but is doing so profitably. The long-term target for Management Cash EBIT is an ambitious 30%, indicating confidence in future margin expansion.

Strong Market Position

HPG remains the #1 platform in Australia and New Zealand for connecting tradies and homeowners. The company has high brand awareness (68%) among both tradies and homeowners and a significant market penetration of 19% of the Serviceable Available Market (SAM).

Positive FY26 Outlook Management has provided a confident outlook for FY26, targeting 10-12% revenue growth, an EBITDA margin of 24-26%, and a substantial increase in Free Cash Flow to between $8 million and $10 million. This guidance suggests that the positive momentum is expected to continue.

Financial Highlights FY25 and H1 FY25

Revenue:

Total revenue for FY25 reached $83.1 million, up 10% from FY24, with recurring revenue at $80.8 million (97% of total revenue). H1 FY25 revenue was $40.6 million, up 10% from H1 FY24.

MRR (Monthly Recurring Revenue):

Grew 14% to $7.37 million for FY25 and to $6.84 million for H1 FY25.

ARPU (Annual Revenue Per User):

Increased by 9% to $2,267 in FY25; for Australia, ARPU was $2,381, and NZ was $1,190.

EBITDA:

FY25 EBITDA before significant items was $19.6 million, with a 24% margin (up 2 ppt from FY24), while H1 FY25 EBITDA was $8.7 million with a 21% margin.

Profit:

Statutory net profit after tax for FY25 was $2.39 million, while the half-year result was a small profit of $73,000, reflecting prior year gains from one-off transactions.

Cash Flow:

Free Cash Flow significantly improved to $5.6 million in FY25 (up 162%) and $1.2 million in H1 FY25 (positive vs. negative in H1 FY24). Closing cash and funds on deposit were $26.9 million at FY25 end and $22.5 million at H1 FY25.

Subscription Tradies:

Stable at about 36,600 for FY25 and 34,900 at H1 FY25, with a slight dip in NZ due to migration to a full subscription model but growth in Australia.

Strategic Milestones and Growth Drivers

Successful migration of over 33,000 Australian tradies onto the single tradie platform (Hipages tradiecore) in FY25.

New pricing plans introduced, with most existing Australian customers migrating to these by end calendar 2025.

Transition to a full subscription model in New Zealand, improving revenue visibility and ARPU.

Continued strong marketplace activity and connection rates with homeowners (over 85% of jobs connected to tradies).

Expansion of tradie job management features and add-on services like insurance, financing, and business tools.

Incorporation of AI and machine learning for job matching and credit usage optimization.

Significant brand awareness, including partnerships with TV programs like The Block and Dream Home.

Focus on expanding homeowner platform and ecosystem for deeper engagement.

Liquidity and Market Position

Hipages is a small-cap ASX stock with average daily volumes between 100,000 and 300,000 stock, featuring a tight bid-ask spread of 1-3 cents.

The market capitalization ranges roughly between AUD $150–170 million, indicating higher volatility and liquidity risks compared to mid- or large-cap stocks.

The stock is tradable for small positions with reasonable spreads but not comparable in liquidity to larger companies.

HPG is tradable for small positions with reasonable spreads. But it is not in the same league as large/mid-cap stocks with millions traded daily. It is small-cap and carries higher liquidity risk.

Book Depth

Depth usually shows multiple buy and sell orders near market price, but not stacked in huge blocks.

If you’re trading small parcels (10–20 stock as you said), execution is almost always immediate. Larger trades may move the price more.

Daily Dollar Volume (ADV × Price)

With ~200k stock traded × ~$1.20 = ~$240k daily turnover.

This is well below the $10–20 million daily turnover that defines highly liquid stocks.

Market Cap & Category

Market cap: ~AUD $150–170 million (depending on price).

Company Performance (FY25)

Revenue: $83.1m (+10%)

Recurring revenue: 97% of total, showing strong subscription model

EBITDA: $19.6m, margin 24% (expanding)

NPAT: $2.4m (up from $0.1m in FY24)

Free Cash Flow: $5.6m, up 162%

Cash: $26.9m, no debt

Operationally, Hipages has delivered:

ARPU up 9% (Australia $2,381, NZ $1,190)

Subscription tradies stable (~33k in AU, 3k+ in NZ)

NZ now 100% subscription model, boosting visibility

Strategic evolution from marketplace → SaaS tradie platform, with AI and “Toolbox” services ahead

Outlook & Potential to Return to the stock price $4.10 of 10/09/2021

To get back to the stock price $4.10 of 10/09/2021, Hipages would likely need to double or triple earnings and revenue over the next few years, while proving itself as an indispensable SaaS platform

It is possible, but not guaranteed — depends on execution + housing cycle recovery

Positives:

Strong shift to SaaS, predictable recurring revenue (97%).

Expanding margins and positive cash flow

Brand awareness at 68%+ among homeowners and tradies

Well positioned in a $175b TAM trade services market

Fundamentals:

Much improved in FY25, recurring revenue very high, margins expanding, cash-positive, no debt.

Upside:

If SaaS transition + ARPU growth deliver, stock could trend back toward IPO levels ($4+), but that requires several years of strong growth.

Risk:

If housing/tradie demand slows or execution stumbles, stock may stagnate.

Corporate Governance and Leadership

The Board consists of experienced executives and independent directors with strong backgrounds in technology, finance, and law.

Roby Sharon-Zipser, co-founder and CEO, and Jaco Jonker, CFO & COO, are key executives driving strategy and operations.

The company maintains robust corporate governance, prioritizes cyber resilience, and fosters an award-winning inclusive culture.

ESG and Social Responsibility

Committed to sustainability with ongoing measurement of carbon footprint and initiatives supporting environmental impact (e.g., tree planting challenge).

High focus on Diversity, Equity, and Belonging (DEB), with gender pay parity and active recruitment of underrepresented Group Holdings Ltd Holdings Ltds.

Investment in employee wellbeing, development, and engagement to maintain a high-performance culture.

Outlook FY26

The company expects continued revenue growth in the low teens percentage range.

Planned EBITDA margin expansion of 1-2 percentage points above FY24 levels.

Free cash flow forecasted between $8 million and $10 million.

Ongoing technology investments focused on SaaS platform evolution, AI integration, and enhanced user experience.

Expansion of adjacent tradie services and homeowner products is planned to deepen engagement and revenue streams.

The comprehensive financial documents and presentations clearly portray Hipages Group Holdings Ltd Holdings Ltd as a financially stable, strategically evolving leader in the Australian and New Zealand tradie marketplace transitioning successfully into a SaaS platform with strong growth potential and disciplined financial management.

Future Share Price Projection ($4.10 Target)

Reaching the previous high of 10/09/2021

$4.10 from its current price of $1.29 would require the share price to more than triple, representing a market capitalisation of approximately $550 million (based on 134,045,376 stock on issue),

For the share price to reach this level in the next 2-3 years, the market would need to see a combination of the following:

Sustained High Growth The company would need to consistently meet or exceed its double-digit revenue growth targets. The FY26 forecast of 10-12% growth is a strong start.

Significant Margin Expansion Continued improvement in EBITDA margins and, most importantly, free cash flow will be critical. The FY26 FCF target of $8-10 million would be a significant step up and would likely be viewed very positively by investors.

Proven Success of the SaaS Model The market will be looking for clear evidence that the Tradiecore platform is increasing tradie retention and lifetime value. Growth in Monthly Active Users (MAUs) and a stable or increasing retention rate will be key metrics to watch.

Market Re-rating The stock would need to be valued more highly by the market. This often happens when a company successfully transitions from a marketplace to a higher-margin, recurring-revenue SaaS model, which typically commands a higher valuation multiple.

Given the strong FY25 performance, successful strategic execution, and positive FY26 outlook, there is a clear pathway for the business to continue growing and improving its financial metrics. If Hipages can successfully execute its strategy over the next 2-3 years, continuing to deliver strong growth in revenue and free cash flow while proving the value of its SaaS platform, a significant re-rating of the share price is certainly plausible.

There are Potential Risks and Challenges to Consider

Market Competition While Hipages is the market leader, the digital marketplace is competitive. The company must continue to innovate to maintain its edge. Management acknowledges the risk of intensified competition, particularly in job management services.

Macroeconomic Factors The home improvement market can be sensitive to economic downturns. Although the company notes its model has counter-cyclical benefits, a severe deterioration in macroeconomic conditions could impact homeowner demand and tradie spending.

Technology and Cybersecurity As a technology platform, Hipages is exposed to risks related to operational resilience, cybersecurity threats, and the need for continuous technological evolution, including the integration of AI.

Execution Risk The full benefits of the Tradiecore platform depend on driving adoption of its job management features. While early signs are positive, with 13% of the tradie base now Monthly Active Users (MAUs), successful execution remains key to unlocking higher retention and lifetime value.

Scenario Highlights

🔺Bull Case (20% revenue growth, 8% NPAT margin, P/E ~35x)

Revenue grows to ~$144m by 2028

NPAT rises to ~$11.5m

EPS ~9.6 cents

Share price: ~$3.35

🔺Base Case (10% revenue growth, 5% NPAT margin, P/E ~25x)

Revenue ~$111m by 2028

NPAT ~$5.5m

EPS ~4.6 cents

Share price: ~$1.15 

🔺Bear Case (3% revenue growth, 2% NPAT margin, P/E ~15x)

Revenue ~$91m by 2028

NPAT ~$1.8m

EPS ~1.5 cents

Share price: ~$0.23

What’s Needed for $4.10 Again?

At 2028 EPS of ~12c–13c and a P/E multiple of ~30–35x, Hipages could return to ~$4.10.

That would require:

Revenue growth >25% annually,

NPAT margins closer to 10–12%, and

Sustained investor confidence in its SaaS strategy.

Bottom line:

$4.10 again is possible, but only in a super-bull case with strong compounding growth and re-rating.

More realistically, the Bull Case ($3–3.50) is achievable if execution is solid and housing conditions improve.

🔺Super-Bull Scenario (2025–2028)

Revenue: grows from $83m → $174m by 2028

NPAT margin: expands to 12% (tech/SaaS standard)

NPAT: rises from ~$10m → ~$21m

EPS: increases from ~8c → ~17c

Implied share price

2026: $3.72

2027: $4.77

2028: $6.10

What This Means

At this pace, Hipages would surpass its old IPO high of $4.10 by 2027, with potential to reach the mid-$6 range by 2028.

Achieving this would require:

Consistently 25–30% top-line growth (driven by tradie subscriptions, ARPU uplift, SaaS adoption in AU & NZ).

Margin expansion to 12%+, through efficiency gains, upselling “Toolbox” and AI-driven services.

Market re-rating Hipages as a true SaaS platform, not just a marketplace.

Summary:

Under conservative or base assumptions, HPG struggles to get back to $4.

But under a Super-Bull case, HPG not only regains $4.10 by 2027 but could push past $6 by 2028 if it executes like a growth tech stock.