Penny stock Hardide (LSE:HDD) is lighting up the London Stock Exchange this year. After starting the year at 18.5p, it has surged to 94p, turning a £2,000 investment into around £10,150.
Could this high flyer be worth considering for a Stocks and Shares ISA or SIPP? Let’s discuss.
Numerous contracts wins in 2026
I last covered Hardide around a month ago, when it was trading at 78p. In that article, I explained why it had surged in the first half of the year.
In short, the company – which provides advanced tungsten carbide/tungsten metal matrix composite coatings that increase the life of critical metal parts in abrasive, erosive, corrosive, and chemically aggressive environments – had won a number of large contracts from a US-based customer in the energy industry. These contracts have dramatically improved the company’s financial performance.
A strong trading update
Fast-forward to today, and the share price is much higher. That’s because we’ve just had a really strong trading update from the company.
In this update, the company said that it’s achieving operating profit margins that are higher than anticipated and that the board now expects that full-year financial performance will be materially ahead of its previous expectations. This is due to the effective management of input cost inflation, operational efficiencies, and a lower-than-expected investment requirement to support the growth that is coming through.
It also said that the board is confident about the future. Not only does it expect to double its revenues in the current financial year (ending 30 September) but it’s planning to more than double annual revenues again over the next two to three years.
Looking ahead, it expects to achieve growth by diversifying its customer base, growing existing key accounts, and pursuing opportunities in new industries such as semiconductors. To support this anticipated growth, it plans to invest £4.5m in three new coating reactors and associated infrastructure.
Can the penny stock keep rising?
Is Hardide worth a look as a speculative growth play? I believe so.
It’s definitely higher up on the risk spectrum. Not only are we talking about a tiny company with a volatile share price, but a lot of its revenues are coming from one customer so there’s a high degree of customer concentration risk.
The company has a lot of momentum at the moment though. And with the US currently building a ton of infrastructure, there could be many opportunities for the business in the years ahead.
As for the valuation, it doesn’t look stretched. With analysts at Cavendish forecasting earnings per share of 7.7p for the year starting 1 October, the forward-looking price-to-earnings (P/E) ratio is only around 12.
One other thing to like is that co-founder Dr. Yuri Zhuk – who is currently Technical Director and shortly about to become the group’s Chief Technology Officer – is still around. He has managed the company’s CVD coating technology development from early laboratory stage to the aerospace-approved manufacturing technology now used by blue-chip customers, so this gives me a degree of confidence in the outlook.
Should you invest £5,000 in Hardide right now?
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Edward Sheldon owns shares in London Stock Exchange Group.
