The Hipages Group Holdings Ltd (ASX: HPG) share price has been on fire over the last few weeks.
The tradie-focused online lead generation platform provider's shares were on form on Thursday, jumping 7% to a record high of $3.50.
This means the Hipages share price is up 34% since this time last month and 44% since I suggested investors look at it in the middle of May.
Why is the Hipages share price on fire?
Interestingly, the Hipages share price has been rising strongly over the last month despite there being no news out of the company. Though, it was the subject of another bullish broker note out of Goldman Sachs on 17 June.
That note revealed that the broker had retained its buy rating and lifted its price target on the company's shares to $3.40.
At that point, Goldman said: "In our view the strength and quality of the HPG marketplace is not reflected in the current share price. Our 12m TP of A$3.40 offers 36% upside; we maintain our Buy recommendation."
Why is Goldman positive on the company?
Hipages is a leading Australian-based online platform and software as a service (SaaS) provider that connects tradies with residential and commercial consumers. Its platform not only helps tradies grow their businesses by providing job leads, it also allows them to communicate with customers and run general admin duties.
Goldman notes that Hipages "is building a compelling marketplace, with a healthy balance between consumers and tradies. App download data and website visits shows HPG is executing on its tradie marketing strategy."
This is a big positive as the broker believes Hipages has a huge long term growth opportunity and has likened it to Carsales.Com Ltd (ASX: CAR) and REA Group Limited (ASX: REA) in the early days. And given how these ASX shares have performed over the last decade, this could be good news for the Hipages share price.
Commenting on the long term, Goldman said: "Over the long term, the company has clearly articulated its strategy is to further evolve the ecosystem to increase the value it can provide to a tradie. This includes development of payment solutions, insurance and materials procurement. In our view the road-map to build out the ecosystem provides a notable adjacency for HPG to grow its market share and TAM and provides a strong long-term growth driver."
"For context, HPG captures c.5% of total industry advertising spend. We see scope for this to grow at a meaningful rate as HPG's service offering addresses a greater proportion of a tradie's needs, noting that REA/CAR now capture c.40-60% of spending in their respective categories," it added.
This certainly makes Hipages one to watch closely over the coming years.
