Orion Energy Systems, Inc. (NASDAQ: OESX) is showing no signs of slowing down after starting the year on a roll. Its share price has more than tripled in value as bulls have assumed control of the stock.
Orion Energy Systems Price Analysis
A 300% plus rally underscores the strength of the upward momentum and the renewed investor interest in the stock. The leading provider of enterprise-grade LED lighting solutions has seen its market sentiments edge higher on the confirmation of a $35 million LED lightning installation contract.
In the recent past, the Company has secured an add-on customer commitment for an estimated $64 million in LED lighting installations. The unveiling of new and improved lighting products is another catalyst that continues to fuel Orion Energy Systems price action activity.
Fourth quarter and full year financial results indicating year over year growth in revenues and narrowing net loss are other developments that continue to excite investors. The stock flying high in view of the flurry of positive developments thus does not come as a surprise.
As the stock continues to trade in a steep uptrend, pullbacks have so far acted as reliable entry positions. After the recent spike, the $2 mark is the immediate support above which the stock looks set to continue powering high on pullbacks.
A breach of the $2 support level would leave the stock exposed to dropping back to the $1.50 level the next substantial support level. In our view, Orion is likely to continue edging higher as a pullback play given the strength of the upward momentum.
About Orion Energy Systems
Orion Energy Systems is engaged in the design development and manufacturing of energy management systems. The Company’s product line is made up of LED solid-state lighting and smart controls. Its lead product is the LED Troffer Door Retrofit used in office and retail grid ceilings.
Shares of Orion Energy Systems are exploding on huge trading volumes on the delivery of fourth quarter and full year financial results that underscore underlying growth. According to the Chief Executive Officer, Mike Altschaefl, the financial results reflect solid execution of national accounts channels as well as efforts in the building of the energy service company.
Net revenue in the quarter rose 49% to $22.4 million as full-year revenues increased 9% to $65.8 million. Q4 net loss dropped to $0.9 million from $1.5 million a year earlier. Full-year net loss reduced by nearly half to $6.7 million from $13.1 million reported a year earlier.
The ability to offer comprehensive turnkey project management services at the back of best in class customer services, allows Orion Energy Systems to deliver energy reductions and cost savings.
“We are dedicating increasing resources to capitalize on our unique capabilities for large national accounts. This focus enabled us to achieve some very significant contracts that contributed to a strong finish to FY 2019 and provides good visibility for substantially increased FY 2020 revenues,” said Mr. Altschaefl.
Growing Purchase Orders
Orion is increasingly becoming a leader in large-scale energy, efficient-lighting, and smart building retrofits. The Company’s product eliciting strong demand in the market signals what could turn out to be a record-breaking year. The announcement that the Company expects an additional $64 million from an add-on customer underscores how the LED solutions are resonating well with consumers.
The Company has received a commitment to expand the retrofit of major national account customers lighting systems as part of the $64 million deal. The project entails the installation of LED lighting fixtures, as well as state of the art internet of Things, control integration. Orion was selected because of its proven ability to design, develop, and install customized energy efficient LED lighting solutions.
“It is gratifying that Orion’s performance with this customer provided it with the confidence to substantially expand our role in their nationwide LED lighting retrofit plans. We look forward to the successful completion of these installations and are optimistic regarding the potential to secure additional projects with this customer,” added Mr. Altschaefl.
What next For Orion Energy Systems
Orion Energy Systems is a fundamentally attractive investment as a leader in enterprise-grade LED lighting and energy project solutions. The stock looks set to continue climbing the ladder after turning bullish at the start of the year. For investors that have yet to buy in, dips are to be bought as the NASDAQ: OESX bull run is set to continue.
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Disclosure: We have no position in OESX and have not been compensated for this article.