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HPG: Higher Discount Rate Will Support Attractive Long Term Earnings Profile

Skilled Tradie Shortages And Regulation Will Squeeze Margins

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HPG
AnalystLowTarget
Not Invested
Published 09 Jul 2025
2 viewsusers have viewed this narrative update

Update shared on 25 Mar 2026

Fair value Decreased 27%
Next
09 May
AU$0.77
AnalystLowTarget's Fair Value
AU$0.78
1.9% undervalued intrinsic discount
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1Y
-6.1%
7D
8.5%

Analysts have trimmed their price target on hipages Group Holdings from A$1.37 to A$1.00, citing updated assumptions that include a higher discount rate, more moderate revenue growth, slightly lower profit margin expectations and a reduced future P/E multiple.

What's in the News

  • hipages Group Holdings issued earnings guidance for fiscal year 2026, with revenue expected to be in the range of A$90 million to A$91 million (company guidance).

Valuation Changes

  • Fair Value: trimmed from A$1.37 to A$1.00, a reduction of about 27% in the implied valuation per share.
  • Discount Rate: revised from 7.70% to 8.28%, indicating a higher required return for valuing future cash flows.
  • Revenue Growth: adjusted from 8.47% to 7.57%, reflecting more moderate expectations for top line expansion.
  • Net Profit Margin: moved from 8.48% to 8.28%, a slight softening in long run profitability assumptions.
  • Future P/E: reduced from 25.47x to 19.14x, pointing to a lower valuation multiple being applied to expected earnings.

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Disclaimer

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