Digital Transformation And Mobile Adoption Will Expand Home Services

Key Takeaways

• Targeted customer engagement and expansion into new service categories could unlock significant revenue and ARPU growth beyond current market forecasts.
  
• Digital transformation, mobile-first strategy, and data monetization initiatives position hipages for sustained market share gains and profitability improvement.
  
• Heavy dependence on user growth, competitive threats, and regional risks may constrain profitability, especially if platform adoption and new SaaS features fail to gain traction.

Catalysts

Operates as an online tradie marketplace in Australia and New Zealand.

• Analyst consensus expects recurring revenue and ARPU to rise from subscription migrations, but this underestimates the long tail opportunity; with less than 10% of customers using core job management features today, targeted engagement initiatives could unlock a step-change in ARPU and retention rates, driving outsized top-line growth and sustained EBITDA margin expansion far beyond current projections.
  
• Analysts broadly agree on ARPU uplift in New Zealand post-subscription migration, but the pace and sustainability may be understated-new operational sales support is already driving rapid tradie account growth and higher contract values, positioning hipages for a much faster ARPU and revenue ramp than is currently forecast, especially as the subscription model matures.
  
• Ongoing digital transformation and accelerated smartphone adoption are expanding the total addressable market for hipages, while the company's mobile-first product development positions it to capture rising service demand, supporting above-market revenue growth and higher user lifetime value.
  
• Expansion into adjacent categories beyond core trades-such as cleaning, landscaping, and emergency repairs-is gaining traction and holds potential to double or even triple the total transaction volume handled on the platform in coming years, significantly boosting both revenue and ARPU.
  
• As hipages' data advantage grows, its ability to monetize insights and offer targeted marketing and premium analytics packages to tradies represents an untapped, high-margin revenue stream that can meaningfully lift net income and drive a structural rerating of profitability multiples.

hipages Group Holdings Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on hipages Group Holdings compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming hipages Group Holdings's revenue will grow by 11.6% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from -0.1% today to 10.4% in 3 years time.
• The bullish analysts expect earnings to reach A$11.4 million (and earnings per share of A$0.15) by about July 2028, up from A$-69.0 thousand today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 31.5x on those 2028 earnings, up from -1923.3x today. This future PE is lower than the current PE for the AU Interactive Media and Services industry at 51.6x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.73%, as per the Simply Wall St company report.

hipages Group Holdings Future Earnings Per Share Growth

Risks

• The company is highly dependent on ongoing marketing investments to acquire and retain both tradies and homeowners, and if user acquisition costs escalate due to stricter privacy regulations or higher digital ad pricing, this could materially compress hipages' net margins and reduce earnings over time.
  
• Secular pressure from economic stagnation or downturns could diminish consumer demand for home improvement services, leading to lower platform transaction volumes and directly reducing hipages' top-line revenue growth.
  
• Intensifying competition, both from established classifieds/marketplace rivals (Airtasker, Oneflare, Google, Meta) and possible entrants leveraging AI or new tech, poses a credible threat to hipages' market share and user loyalty, potentially stalling or reversing revenue expansion.
  
• The platform's transformation to a SaaS model and reliance on new job management features carries significant execution risk-over 90% of Australian tradies have yet to adopt these higher-value features-so failure to drive sustained engagement could limit improvements in retention and recurring revenue.
  
• With its operations focused almost exclusively in Australia and New Zealand, hipages faces concentrated regulatory and market risks; changes to local policy, increased compliance costs, or regional economic issues could generate shocks that undermine both current earnings and long-term revenue stability.

Valuation

• The assumed bullish price target for hipages Group Holdings is A$2.14, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of hipages Group Holdings's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of A$2.14, and the most bearish reporting a price target of just A$1.35.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be A$109.7 million, earnings will come to A$11.4 million, and it would be trading on a PE ratio of 31.5x, assuming you use a discount rate of 7.7%.
• Given the current share price of A$0.99, the bullish analyst price target of A$2.14 is 53.7% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.