Fund Manager Summary on Hipages Group Holdings Ltd (ASX:HPG)
Hipages Group Holdings Ltd (ASX: HPG) is emerging as a significant player in the Australian trades marketplace, with recent fund manager insights indicating strong financial performance and promising growth prospects. Following its successful transition of 33,000 customers to a new platform, Hipages has achieved 10% revenue growth and is targeting 10-12% growth for FY26, highlighting substantial upside in the 300,000-trade business market. Fund managers note improved operating leverage, with nearly half of incremental revenues contributing to free cash flow, expected to grow by 60% this year. However, risks include the dependency on customer retention and the pace of expanding the trades network, currently at 50,000 paying customers. Strategic initiatives, such as enhancing software features and exploring M&A opportunities, are critical for driving long-term value, while the stock's valuation at 17x free cash flow suggests it may be undervalued, providing a potential re-rating opportunity.
Commentary From The Managers
There are 3 insights from 2 fund managers regarding their investment in Hipages Group Holdings Ltd (ASX:HPG) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Forager Funds
30 Sept 2025
$1.31
Summary
- Forager Funds observes that Hipages Group Holdings Ltd. (HPG) is making strides towards its long-term profitability goals.
- In the 2025 financial year, nearly half of the incremental revenue translated into free cash flow, indicating strong operating leverage.
- Long-term targets suggest that free cash flow can sustain growth at over 40%, significantly enhancing cash generation.
- Guidance for the current financial year indicates a projected growth of 60% in free cash flow.
- Growth has been driven by the transition of tradies onto Hipages' new platform in 2025.
- Most tradies have been moved to new, more expensive pricing plans, contributing to revenue growth.
- Average revenue per customer in Australia rose by 8%, despite only a 1% increase in the number of tradies on the platform.
- As tradie churn improves with the new platform, growth in the number of tradies is expected to more significantly impact revenue growth.
Tamim Funds Management
31 Aug 2025
$1.27
Summary
- Tamim Funds Management notes that Hipages (ASX: HPG) has delivered strong financial performance in FY25.
- The company successfully transitioned 33,000 customers to a new integrated platform, resulting in 10% revenue growth.
- Strategic pricing and subscription adjustments have contributed to this growth.
- Hipages provides a $32 return for every $1 spent, indicating significant value for trades.
- For FY26, Hipages targets 10-12% revenue growth, 24-26% EBITDA, and $8-10 million in free cash flow.
- There is substantial expansion potential in the 300,000 Australian trade businesses market, with Hipages currently serving 50,000 paying customers.
- Strategic focus includes developing a comprehensive service ecosystem and implementing intelligent pricing.
- Hipages is exploring M&A opportunities to enhance growth.
- By improving software features and adding services like accounting integrations, Hipages aims to boost customer retention.
- Tamim Funds Management believes the stock is undervalued at 17x FCF and expects it to re-rate over time.
Forager Funds
30 June 2024
$1.06
Summary
- Forager Funds continues to hold Hipages Group Holdings Ltd due to its consistent revenue growth.
- Meaningful operating leverage has been observed within the business.
- Hipages is edging closer to free cash flow generation.
- The company has forecast more meaningful free cash flow in the coming years.
- Improvements to the platform and pricing increases have been implemented.
- Launch of new products aims to reduce tradie churn.
- Despite the share price rising only 36% over the year, early financial year acquisitions at depressed prices have benefited the portfolio.
- Hipages contributed 1.2% to portfolio returns.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Hipages Group Holdings Ltd (ASX:HPG)?
Fund managers including Forager Funds and Tamim Funds Management have invested in Hipages Group Holdings Ltd (ASX:HPG).
Why do fund managers invest in Hipages Group Holdings Ltd?
Fund managers invest in Hipages Group Holdings Ltd due to its strong financial performance and growth potential in the Australian trade marketplace. The company has successfully transitioned a significant customer base to a new platform, leading to 10% revenue growth and improved operating leverage. With ambitious targets for revenue and EBITDA growth in FY26, a significant market expansion opportunity, and promising cash flow forecasts, Hipages demonstrates an attractive risk/reward profile. Additionally, its strategic initiatives for increasing customer retention and enhancing service offerings further strengthen its investment appeal.
What happened to Hipages Group Holdings Ltd (ASX:HPG)?
Fund managers are optimistic about Hipages Group Holdings Ltd due to its progress towards long-term profitability targets and strong operating leverage, with nearly half of the incremental revenue from 2025 contributing to free cash flow. The company's shift to a new platform has resulted in an 8% increase in average revenue per customer and improved tradie retention, driving projected free cash flow growth of 60% for the upcoming financial year.
What is the short interest in Hipages Group Holdings Ltd (ASX:HPG)?
The short interest in Hipages Group Holdings Ltd (ASX:HPG) is 0.02% which makes it the 498th most shorted stock on the ASX. Of the 136.9M shares that Hipages Group Holdings Ltd has on issue, 24.6K have been sold short.
What does Hipages Group Holdings Ltd (ASX:HPG) do?
hipages Group Holdings Ltd. engages in the provision of an Australian-based online platform and Software as a Service provider for trades. It operates through the Australia and New Zealand geographical segments. The Australia segment focuses on Hipages online tradie platform connecting tradies with residential and commercial consumers. The New Zealand segment includes Builderscrack online tradie platform connecting tradies with residential and commercial consumers. The company was founded by Robert Sharon-Zipser and David Vitek in 2004 and is headquartered in Sydney, Australia.