Hammond Power (HPS-A) ripped nearly 30% on its Q3 print, which beat on revenue thanks to significant U.S. growth…
… but missed on earnings, as tariff impacts pressure margins. That should be short-lived, as management’s price increase should improve profitability in Q4…
… as should its data center backlog, which comes at much higher volume than a typical order - enabling efficiency gains in the manufacturing process.
So what we see in a lot of other industries, we will do a design, and there will be a handful, maybe 2, 3, maybe 6 transformers for that project… you may see hundreds of the same design for some data center buildup.
That’s what drove the price action, with the company announcing orders representing over 50% of its already growing backlog…
… increasing the market’s expectations and supporting multiple expansion as the data center theme gets priced in.
