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Friday, May 20, 2022

Orbital Energy Group, Inc. (OEG) Stock High on Volatility, Should Investors Buy?

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Orbital Energy Group, Inc. (OEG) is an infrastructure solutions provider for engineering, construction, design, and maintenance services to its industry-specific clients. The construction industry grew at a CAGR of 9% from $11,491 billion in 2020 to approximately $12,526 billion in 2021 and is estimated to reach $16614 billion in 2025 with a CAGR of 7%. The most recent ranking of OEG showed that it is ranked at 18th position out of a total of 33 in the industry.

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OEG: Recent Announcement

OEG reported on April 21, that the rollout of the preliminary trainees by its subsidiary Orbital Solar Services of their recently developed Unbound Horizons program at two project sites of Lightsource bp including Black Bear Solar and Conway Solar. OEG is the EPC contractor for both projects.

OEG: Earnings

Revenues of OEG for the full fiscal year 2021ended December 31, 2021, were reported to be $82.9 million, with an approximate 115% remarkable increase from fiscal 2020. As far as the diluted earnings per share are concerned, a decrease of 14% was noted and the EPS was -$1.05. The company is showing a positive trend of revenue growth since 2017. The projected revenue for the full fiscal year 2022 is $330 million with a non-GAAP EPS of -$0.14.

Source: Chartmill

Comparison with Peers

OEG stock when compared to its peers such as LMB, ISUN, TPC, MTRX, and ORN, it was established that almost all these companies showed a similar trajectory in a decline of their shares price. This specific industry faced a collapse during the pandemic and it is still recovering from its effects.

Source: Benzinga

Insider Transaction and Analyst Ratings

The total number of outstanding shares owned by OEG is 85.4 million, of which 20.5% of shares are being possessed by the insiders, while the institutional investors are the major stakeholders with 22.07% shares of the company. B. Riley Securities upgraded the company’s rating from neutral to buy and raised its price target from $4 to $12.

Risk Factors

Certain risk factors loom over OEG including the substantial dilution of the stockholders in the past year and the incline in the volatility of the shares price in the past three months are some of the contributing factors. Also, the company has less than one year of cash runway so it’s risky to invest.

Bottom line

The earnings of the company are forecasted to grow by 135% per year which gives the company a sigh of relief to attract the investment. As the volatility is high during the last few months, stakeholders should keep this fact into consideration.

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