The Hipages Group Holdings Ltd (ASX: HPG) share price has been a positive performer over the last 30 days.
Since this time last month, the online tradie marketplace provider’s shares are up almost 10%.
Can the Hipages share price go higher?
Despite its strong gain over the last month, one leading broker believes its shares can still go a lot higher from here.
According to a note out of Goldman Sachs this morning, the broker has reiterated its buy rating and $3.10 price target on its shares.
Based on the current Hipages share price, this implies potential upside of 35% over the next 12 months.
What did Goldman Sachs say?
Goldman notes that Hipages is leveraged to steady underlying repairs and maintenance spend in the Australian housing sector.
In addition, it points out that the recent house price boom and structural shift to working from home, in combination with excess savings in the economy, is driving additional consumer demand for tradies.
Goldman believes Hipages is well-placed to capture an increasing share of this spend.
What about long term?
Goldman said: “Despite being the market leader, HPG share remains significantly below the share of leading marketplaces in other categories. HPG currently captures c.5% of total tradie industry advertising spend. By contrast REA/CAR capture c.40-60% of spending in their respective categories. We see scope for HPG to grow its share towards these levels over the long term as the marketplace matures and tradie spend shifts to online.”
“HPG is gaining traction through initiatives such as its marketing strategy (including sponsoring “The Block”) and is deepening its ecosystem for tradies. We see scope for adjacencies to drive marketplace leadership; e.g. the roll out of the new Field Service Software solution,” it added.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Hipages Group Holdings Ltd. The Motley Fool Australia has recommended carsales.com Limited and REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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