Is XPEL a good stock to buy? We came across a bullish thesis on XPEL, Inc. on Hidden Rock Capital’s Newsletter’s Substack by Hidden Rock Capital. In this article, we will summarize the bulls’ thesis on XPEL. XPEL, Inc.’s share was trading at $44.87 as of June 8th. XPEL’s trailing P/E was 23.33 according to Yahoo Finance.
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XPEL, Inc. (XPEL) is a niche leader in the rapidly growing paint protection film (PPF) industry, operating as an asset-light compounder focused on providing software-enabled cutting solutions and protective film products used to shield vehicle exteriors from scratches, chips, and general wear. The company built a strong early-mover advantage by embedding itself within installer networks and dealership channels, becoming the only pure-play publicly traded company primarily dedicated to PPF, while larger competitors such as Eastman Chemical Company (EMN) and 3M Company (MMM) treat it as a peripheral business line.
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This positioning enabled XPEL to scale revenues from approximately $6 million in 2011 to around $260 million by 2021, cementing its reputation as a high-quality compounder that delivered over 4,000% growth and more than 4,200% stock appreciation over the past decade, despite recent underperformance since 2021.
XPEL’s recent stock weakness is attributed to temporary headwinds rather than structural deterioration, including inventory normalization, macro-driven softness in automotive demand, and significant internal investments in supply chain integration and global distribution, including the acquisition of a Chinese distributor in 2025.
These factors compressed EBIT margins from 16–17% in 2022–2023 to roughly 13–14% in 2024–2025, masking the underlying durability of the business model. As these investments complete and channel inventory stabilizes, margins are expected to revert toward historical levels of 16–17%, with potential expansion toward 20%+ over time driven by operating leverage and improved mix.
At current levels under $50 per share, XPEL trades at approximately 16–17x projected 2027 earnings of $2.80 per share, a significant discount to its historical 30–40x multiple range. Applying even the low end of this range implies a price target of $80–$90 per share, representing nearly 80–90% upside and close to a potential double.
Additional catalysts include accelerating revenue growth as macro pressures ease, with growth already reaccelerating to 13% in 2025 after 6% in 2024, alongside strategic optionality given its ~$1.3 billion market capitalization, making it an attractive target for larger coatings or automotive players or private equity buyers. CEO Ryan Pape’s ~4% ownership further aligns management with shareholders, reinforcing the long-term compounding thesis.
Previously, we covered a bullish thesis on XPEL, Inc. (XPEL) by Reasonable-Green-464 in January 2025, which highlighted EV-driven demand, international expansion, and diversified product growth across paint protection films and coatings. XPEL’s stock price has appreciated by approximately 3.48% since our coverage. Hidden Rock Capital shares a similar view but emphasizes temporary margin compression and multiple re-rating toward historical valuation levels.
XPEL, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held XPEL at the end of the first quarter which was 21 in the previous quarter. While we acknowledge the risk and potential of XPEL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XPEL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
