The Boring Power Infrastructure Company That Is Becoming a Monster 10x Compounder: Hammond Power Solutions ($HPS.A)

Outlier Capital · Outlier Capital · May 28, 2026 at 12:45 · ⏱ 10 min read  | Read on Substack ↗
Summary
Hammond Power Solutions (HPS.A) is a boring but high-quality electrification infrastructure company sitting directly in the bottleneck of AI data center and grid modernization demand. The author argues that despite a re-rated valuation, HPS still has meaningful upside if it converts backlog, scales capacity, and integrates the AEG acquisition to become a broader global electrification platform.
  • •HPS generated C$898.3m revenue and C$133.3m adjusted EBITDA in 2025, with Q1 2026 sales up 31.5% YoY to a record C$264.8m.
  • •Backlog was up 94.6% YoY in Q1 2026, driven largely by data center-related large projects.
  • •The company is adding C$200m in manufacturing capacity (Monterrey 4 and additional custom transformer capacity through 2027).
  • •HPS agreed to acquire AEG Power Solutions for C$365m enterprise value (C$326m revenue in 2025), expanding into industrial UPS, power conversion, and European/Asian markets.
  • •Gross margins declined from 32.8% in 2024 to 30.3% in 2025 due to material costs, tariffs, and ramp-up costs; Q1 2026 gross margin was 30.1%.
  • •The author believes the 10x case requires HPS to become a multi-billion-dollar power infrastructure platform by converting backlog, filling capacity, integrating AEG, and increasing mix of power quality and services.
Read time 10 min
Length 10,438 chars
Category finance
Ideas
Outlier Capital Substack author, Outlier Capital
The author is long HPS because it is a profitable, scaled North American power infrastructure company benefiting from AI data center demand and broader electrification, with a strong backlog, capacity
The author is long HPS because it is a profitable, scaled North American power infrastructure company benefiting from AI data center demand and broader electrification, with a strong backlog, capacity expansion, and potential for a 10x return if execution continues.
HPS.A HIGH
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This newsletter, published May 28, 2026, features Outlier Capital discussing HPS.A. 1 trade idea extracted by AI with direction and confidence scoring.

Speakers: Outlier Capital  · Tickers: HPS.A