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Hardide‘s (LSE:HDD) a spectacular example of what can go right when investing in penny stocks. Since bottoming out at 4p in November 2024, the Hardide share price has skyrocketed almost 2,200%!
Yet I think it can go higher from today’s 99p. Here’s why.
Surging top- and bottom-line growth
As a quick reminder, Hardide’s a provider of advanced tungsten carbide surface coatings. Using a patented chemical vapour deposition (CVD) process, it coats metal components to help them resist wear, corrosion, and erosion in severe environments. The £78m group operates manufacturing facilities in both the UK and US.
As the share price suggests, growth has been explosive. Last year, revenue shot up 27% to £6m, driven by contract wins across the aerospace and energy sectors. Earnings turned positive for the first time in years.
From this foundation, the company’s really kicked on. Revenue for this year (12 months to 30 September) is expected to be around £13.5m — 124% year-on-year growth! And there should be a net profit of £4.5m.
Better still, Hardide believes the foundations are in place to reach £20m in annual revenue over the next two to three years. It’s building three new coating reactors to support this growth, as well establishing two operational leaders to run the plants in the UK and US.
Key customer
Hardide’s unique surface coating solutions have recently been attracting a great deal of interest from major oil and gas companies.
Hardide, December 2025
Key to all this has been a major North American customer in the oil and gas sector. Contracts from here have been coming in quite regularly, with another one valued at around $1.9m announced last week.
Note that this order was the first for the customer’s next-generation design of components. So it seems very likely that further orders will be coming in for Hardide’s patented CVD coating solution.
Two key risks
Now, given the importance of these orders to the firm’s ongoing growth, there’s definitely customer concentration risk. If this equipment manufacturer stopped placing orders, the growth outlook could dim pretty quickly.
Another key risk is raw material inflation, particularly the rising cost of tungsten gas that is used in its coating reactors. In July, the company said it had diversified its sources of tungsten gas supply, securing about 50% of its anticipated requirements for FY27 (starting next month). But there’s uncertainty here.
Adjacent growth opportunities
Despite these risks, I recently snapped up some shares at 95p. That’s because management sees scope to replicate its North American success in the Middle East, where it sees the potential for “significant revenues”.
Obviously, the Iran war isn’t helping right now, but I’m investing here with a longer-term view. Additionally, the company sees adjacent growth opportunities in the semiconductor industry, which is obviously expected to continue booming for years.
Finally, the stock looks quite cheap to me, despite rocketing over 1,200% in the past year. Based on forecasts for FY27, the forward-looking price-to-earnings ratio is just 12.9. That’s low for a high-growth company.
If sales reach £20m+ in the next three years, which increasingly looks likely, I think the stock can double from here given today’s low starting earnings multiple.
Therefore, I reckon it’s worth a closer look at around £1.
Should you invest £5,000 in Hardide right now?
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Ben McPoland owns shares in Hardide.
This story originally appeared on Motley Fool
