Thursday, February 23, 2017 12:11:26 PM
SeekingAlpha Article Feb 22, 2017
Summary:
* Orion reported another great quarter with YoY revenue growth of 23%.
* LED segment now represents 82% of revenues and grew 28% YoY.
* Previous declines in legacy fluorescent/solar products are finished & no longer drag on consolidated results.
* Stock remains incredibly undervalued at less than 0.55x next year's sales and a 2-year forward EV/EBITDA multiple of under 4.0x.
* Outlook for LED demand over the next decade remains as strong as ever.
Price Target
To arrive at our price target of $3.75 we looked at a variety of valuation multiples ranging from P/S, EV/EBITDA, and P/E. $3.75 represents just a 1.4x multiple of current-year sales, 17.9x two-year forward P/E multiple, and 8.9x two-year forward EV/EBITDA multiple. Again, given the growth outlook for the LED industry over the next decade, OESX's continued expansion into the agency sales channel, and strong balance sheet, we believe these multiples are fair.
If you use a $3.00 target, the implied multiples become 1.1x this year's sales, a two-year forward P/E multiple of 13.6x, and a two-year forward EV/EBITDA multiple of 6.8x. We believe those multiples are far too low; a range of $3.50-4.00 is appropriate.
At current levels, Orion stock is trading at a modest premium to book value and only 0.55x next year's sales. With positive EBITDA and CFO next year and over $12 million of net cash on the balance sheet, we struggle to justify hardly any downside from current prices and believe Orion is a truly unique risk-reward opportunity.
Recent OESX News
- Form 8-K - Current report • Edgar (US Regulatory) • 09/20/2024 08:16:02 PM
- Orion Secures Over $2 Million in LED Lighting Retrofit Projects from Leading U.S. Automotive OEM • GlobeNewswire Inc. • 09/18/2024 12:27:00 PM
- LED Lighting and EV Charging Solutions Provider Orion Energy Systems to Attend H.C. Wainwright Investment Conference Sept. 9th and 10th in New York City • GlobeNewswire Inc. • 09/03/2024 11:28:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/13/2024 08:05:58 PM
- LED Lighting and EV Charging Solutions Provider Orion to Present at Sidoti Virtual Microcap Conf. Wednesday, August 14th at 12:15pm ET • GlobeNewswire Inc. • 08/08/2024 12:27:00 PM
- Orion’s Q1’25 Revenue Rose 13% vs Q1’24 to $19.9M Driven by Strength in EV Charging Projects; Maintains FY 2025 Revenue Growth Target of 10-15% • GlobeNewswire Inc. • 08/07/2024 11:29:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/07/2024 11:01:29 AM
- LED Lighting, EV Charging Solutions and Maintenance Services Provider Orion Hosts Q1 Call Wed., Aug. 7th at 10am ET • GlobeNewswire Inc. • 07/24/2024 12:16:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/20/2024 11:39:02 AM
- LED Lighting and EV Charging Solutions Provider Orion to Participate in Virtual Fireside Chat at Noble Capital Markets Virtual Equity Conference Wed. June 26 at 12:30pm ET • GlobeNewswire Inc. • 06/13/2024 06:31:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 09:46:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 09:39:05 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 09:37:18 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 09:32:43 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 09:30:59 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 09:25:20 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 06/12/2024 08:08:31 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/06/2024 11:35:52 AM
- US Index Futures Mixed; Oil Prices Rise • IH Market News • 06/06/2024 11:29:43 AM
- Orion’s Q4’24 Revenue Rose 22% to $26.4M; FY’24 Revenue of $90.6M Driven by Growth Across LED Lighting, EV Charging and Maintenance Businesses; Targets FY 2025 Revenue Growth of 10-15% • GlobeNewswire Inc. • 06/06/2024 11:29:00 AM
- LED Lighting, EV Charging and Maintenance Solutions Provider Orion Hosts Q4 Call Thurs., June 6th at 10am ET • GlobeNewswire Inc. • 05/30/2024 08:13:00 PM
- Form SD - Specialized disclosure report • Edgar (US Regulatory) • 05/30/2024 02:03:21 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/16/2024 12:45:56 PM
- LED Lighting and EV Charging Solutions Provider Orion Previews FY 2024 Results in Anticipation of its Singular Research Webinar Presentation Wed. May 22 at 3pm ET • GlobeNewswire Inc. • 05/16/2024 12:05:38 PM
- Voltrek Successfully Secures More Than $11 Million of EV Charging Construction Services Work • GlobeNewswire Inc. • 04/03/2024 12:32:00 PM
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