Why fund managers say Hipages Group's cash generation isn't reflected in its price

Hipages Group keeps growing free cash flow and repricing its tradie base, but a broader SaaS sell-off has left the stock down sharply over the past year.

30 Jun 2026 · 5 min read

Online tradie marketplace Hipages Group Holdings has continued to grow cash generation even as its share price fell victim to a broader microcap technology sell-off. Investors Mutual Limited's March 2026 Quarterly Report noted the stock fell 43% despite strong free cash flow growth and continued operational execution, adding it remains highly confident in the long-term trajectory of the business.

Pricing power and an emerging ecosystem

Forager Funds' September 2025 Quarterly Report described nearly half of Hipages' incremental revenue falling through to free cash flow last year, with long-term targets suggesting that figure can run above 40%. Average revenue per customer in Australia rose 8% while the number of tradies on the platform grew only 1%, reflecting Hipages' ability to reprice existing customers as it transitions them onto its new platform. Forager's May 2026 Article added detail on where that pricing power is heading next: a recent acquisition of an insurance business that can be distributed to Hipages' existing base of tradies, building out what the manager called an ecosystem around the tradie relationship.

The revenue growth here is also coming with some pretty healthy operating leverage. So the business actually has a target now, 40 to 50% of incremental revenue should be flowing through to pre-tax free cashflow.

— Forager Funds, Article, May 2026

Ellerston Capital has traded the position actively through the volatility, noting a 44% fall over the March 2026 quarter driven by a global SaaS sell-off combined with a first-half earnings miss, while pointing out the company's market capitalisation was by then backed by almost 40% cash. A subsequent 19% rise in April 2026 followed the announcement of a share buy-back, a small acquisition, and reiterated earnings targets.

What managers are watching next

Forager Funds' June 2026 Annual Report summed up the disconnect between execution and share price: first-half revenue increased 11%, with Australian subscription revenue per client up 9%, and cost control remains strong enough that 40-50% of incremental revenue is still expected to drop through to pre-tax free cash flow, even as the stock traded down 24% over the year. With a small recent acquisition and further steps into monetising both the homeowner and tradie base, Forager's view is that this progress is not yet being given much credit by the market.