Why the Hipages (ASX:HPG) share price could be going 36% higher from here

The Hipages Group Holdings Limited (ASX:HPG) share price has been tipped to jump notably higher from here by a leading broker…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Hipages Group Holdings Ltd (ASX: HPG) share price has been a disappointing performer since listing on the Australian share market in November.

The online platform and software as a service (SaaS) provider's shares ended the week at $2.13. Which means they are down 13% from their listing price of $2.45.

What is Hipages?

Hipages is a leading Australian-based online platform and software as a service (SaaS) provider that connects tradies with residential and commercial consumers. It currently has 36,000 tradies subscribed to the platform.

Based on the number of jobs posted, it is the leader in the on-demand tradie economy. The company notes that to date, over three million Australians have changed the way they find, hire, and manage trusted tradies with Hipages.

Approximately $40 million in gross proceeds was raised through its initial public offer (IPO). These funds will be used to drive future growth through investment in its brand and technology platform, as well as its expansion into new channels and adjacent opportunities.

Is the Hipages share price in the buy zone?

According to analysts at Goldman Sachs, the recent weakness in the Hipages share price has dragged its shares down to an attractive level.

This morning it initiated coverage on the company with a buy rating and $2.90 price target. This price target implies potential upside of 36% from its last close price.

Goldman Sachs is a fan of the company due to its belief that in can grow its revenue and particularly its operating earnings strongly over the coming years.

It commented: "We forecast a FY20-FY23E revenue CAGR of 12%, broadly in line with market growth. However, we forecast a materially stronger EBITDA CAGR of 36% as HPG drives improving returns on its sales and marketing spend (brand investment) and further refinements in marketplace efficiencies (balance between the number of tradies on its platform and higher quality job listings)."

"We value HPG based on a 50:50 weighting of EV/EBITDA (FY21 EBITDA Multiple of 25.7x benchmarked to peers, applied to FY22E EBITDA) and a 10-year DCF (WACC 8.9%, TGR 2.5%, revenue CAGR 11.4% and a terminal year EBITDA margin of 39%). This derives our A$2.90 12m target price," it concluded.

Should you invest $1,000 in Boss Resources Limited right now?

Before you buy Boss Resources Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Boss Resources Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ASX Shares

A smiling man take a big bite out of a burrito
Share Market News

Hungry for returns? Are Dominos or Guzman y Gomez ASX shares a better buy in 2025?

Pizza or burritos? Why not both?

Read more »

a woman wearing a close-sitting hat featuring wires and thick computer screen glasses clutches her computer monitor and looks shocked and disturbed as she reads old-fashioned computer text from the screen.
Technology Shares

Here's why ASX 200 tech shares (ASX:XTX) outperformed today

ASX tech shares have taken a turn for the better today.

Read more »

Worker in hard hat looks puzzled with one hand on chin
Resources Shares

Why did the Rio Tinto share price (ASX:RIO) have such a lousy 2021?

We look at what happened to this ASX 200 mining giant's shares last year

Read more »

a miner wearing a hard hat smiles as he stands in front of heavy earth moving equipment on a barren mine site.
Share Gainers

Here's why the Rumble Resources (ASX:RTR) share price is climbing 5%

The mineral explorer's share price is on the rise amid promising drill results.

Read more »

share price high, all time record, record share price, highest, price rise, increase, up,
ASX Shares

Here are the top 10 ASX 200 shares on Wednesday

Here are your top 10 biggest gainers in the ASX 200 on Wednesday.

Read more »

comical investor reading documents and surrounded by calculators
ASX Shares

The ASX reporting wrap-up: WiseTech, Bravura, Seven Group

Just what the investor ordered. Here’s a recap of the companies that reported on Wednesday...

Read more »

Doctor performing an ultrasound on pregnant woman
ASX Shares

The ASX reporting wrap-up: Ansell, Kogan, Nanosonics

Just what the investor ordered. Here’s a recap of the companies that reported on Tuesday...

Read more »

blue arrows representing a rising share price ASX 200
ASX Shares

Here are the top 10 ASX 200 shares on Tuesday

Here are your top 10 biggest gainers in the ASX 200 on Tuesday.

Read more »