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Orion Energy Systems (OESX)
NASDAQ:OESX
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Orion Energy Systems
(NASDAQ:OESX)
50Neutral
Positive Factors
Gross margins
Gross margins for F3Q25 improved to 29.4% due to profitability improvements in the maintenance and lighting segments through price and cost actions.
Sales growth outlook
Management expects to capture some of the delayed LED business in the second half of its fiscal year, with outlook provided for 10% expected sales growth in FY2025.
Negative Factors
Government contracts
Some pressure on the stock may come from Orion Energy's history of winning and deploying government-related contracts in an uncertain environment.
Project delays
Orion Energy's F3Q25 revenues were impacted by delayed LED lighting projects and general market softness reflecting customer uncertainty concerning the economy.
Orion Energy Systems (OESX) vs. S&P 500 (SPY)
Market Cap
$24.24M
Dividend YieldN/A
Average Volume (3M)58.70K
Price to Earnings (P/E)―
Beta (1Y)0.48
Revenue Growth-0.63%
EPS Growth60.93%
CountryUS
Employees260
SectorIndustrials
Sector Strength66
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)-0.22
Shares Outstanding32,952,087
10 Day Avg. Volume42,792
30 Day Avg. Volume58,700
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.31
Price to Cash Flow (P/CF)1.70
P/FCF Ratio1.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.00Price Target Upside305.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Orion Energy Systems Business Overview & Revenue Model
Company DescriptionOrion Energy Systems, Inc. (OESX) is a leading provider of energy-efficient LED lighting products and services, primarily for commercial, industrial, and governmental sectors. The company specializes in the design, manufacturing, and installation of LED lighting systems and controls, offering a comprehensive suite of lighting solutions that aim to improve energy efficiency, reduce costs, and enhance the quality of lighting environments for its clients.
How the Company Makes MoneyOrion Energy Systems generates revenue through the sale of its LED lighting products and systems. The company's revenue streams include direct sales to end-users, such as commercial and industrial businesses, as well as through partnerships with energy service companies and other channel partners. Significant factors contributing to its earnings include the company's ability to provide customized lighting solutions that deliver substantial energy cost savings and its commitment to innovation in LED technology and smart lighting systems. Additionally, Orion Energy Systems may engage in service agreements for the installation and maintenance of its products, contributing further to its revenue.
Orion Energy Systems Financial Statement Overview
Summary
Orion Energy Systems is facing significant financial challenges, with declining revenue and profitability impacting its overall financial health. Although there is an improvement in operating cash flow, the negative equity growth and profitability metrics highlight potential risks. The balance sheet indicates some financial instability, and the company needs to address these challenges to improve its financial position.Income Statement
Orion Energy Systems has experienced a decline in revenue over the past few years, with a notable decrease from $124.38 million in 2022 to $85.26 million in TTM. Gross Profit Margin has decreased from 27.3% in 2022 to 25.2% in TTM, indicating reduced efficiency. The net profit margin has turned negative, with a significant loss in TTM, impacting overall profitability. EBIT and EBITDA margins are negative, reflecting ongoing operational challenges.35
Negative
Balance Sheet
The company's balance sheet shows a moderate equity position with Stockholders' Equity decreasing from $65.1 million in 2022 to $14.48 million in TTM. The Debt-to-Equity Ratio improved due to reduced debt, but the Equity Ratio has weakened, indicating potential financial instability. The Return on Equity has turned negative due to net losses, suggesting challenges in generating returns for shareholders.50
Neutral
Cash Flow
Operating Cash Flow has improved in TTM to $1.47 million compared to a negative figure in the previous year, indicating some recovery in cash generation. However, Free Cash Flow remains constrained, and the Free Cash Flow to Net Income Ratio is negative due to net losses. The company has managed to maintain positive cash flow from financing activities.40
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 85.26M | 90.58M | 77.38M | 124.38M | 116.84M | 150.84M | Gross Profit |
| 21.53M | 20.91M | 17.51M | 33.91M | 30.12M | 37.12M | EBIT |
| -5.30M | -10.82M | -11.22M | 8.39M | 6.84M | 13.11M | EBITDA |
| -3.81M | -8.29M | -14.03M | 9.93M | 8.18M | 14.61M | Net Income Common Stockholders |
| -7.28M | -11.67M | -34.34M | 6.09M | 26.13M | 12.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 24.36M | 5.16M | 15.99M | 14.47M | 19.39M | 28.75M | Total Assets |
| 103.62M | 63.17M | 71.58M | 86.82M | 92.82M | 72.56M | Total Debt |
| 3.72M | 12.11M | 10.02M | 35.00K | 49.00K | 10.10M | Net Debt |
| -19.65M | 6.96M | -5.97M | -14.43M | -19.34M | -18.65M | Total Liabilities |
| 15.95M | 40.63M | 38.33M | 21.72M | 34.75M | 41.53M | Stockholders Equity |
| 87.67M | 22.54M | 33.25M | 65.10M | 58.07M | 31.04M |
| Cash Flow | Free Cash Flow | ||||
| 1.46M | -10.93M | -2.89M | -641.00K | 776.00K | 19.40M | Operating Cash Flow |
| 1.47M | -10.09M | -2.29M | -113.00K | 1.73M | 20.34M | Investing Cash Flow |
| 153.00K | -731.00K | -6.20M | -4.92M | -946.00K | -936.00K | Financing Cash Flow |
| 904.00K | -14.00K | 10.01M | 104.00K | -10.14M | 615.00K |
Orion Energy Systems Technical Analysis
Negative
0.74
Price Trends
0.80
Negative
0.82
Negative
0.90
Negative
Market Momentum
-0.02
Positive
40.47
Neutral
29.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OESX, the sentiment is Negative. The current price of 0.74 is below the 20-day moving average (MA) of 0.75, below the 50-day MA of 0.80, and below the 200-day MA of 0.90, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 40.47 is Neutral, neither overbought nor oversold. The STOCH value of 29.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OESX.
Orion Energy Systems Risk Analysis
Orion Energy Systems disclosed 38 risk factors in its most recent earnings report. Orion Energy Systems reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Orion Energy Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $17.22B | 22.35 | 25.26% | 1.58% | 4.76% | 2.27% | |
70 Outperform | $201.38B | 31.40 | 27.62% | 0.79% | -32.60% | -28.55% | |
69 Neutral | $19.46B | 24.26 | 142.12% | 0.83% | 7.21% | 36.45% | |
66 Neutral | $8.16B | 19.40 | 17.86% | 0.23% | -0.80% | 17.61% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% | |
50 Neutral | $24.24M | ― | -41.45% | ― | -0.63% | 60.93% | |
50 Neutral | $22.71B | ― | -7.10% | ― | -0.76% | -55.03% |
* Industrials Sector Average
Performance Comparison
OESX
Orion Energy Systems
0.74
-0.16
-17.78%
AYI
Acuity Brands
257.26
-14.04
-5.18%
GE
GE Aerospace
187.63
32.64
21.06%
HUBB
Hubbell B
321.35
-90.47
-21.97%
PHG
Koninklijke Philips
23.86
4.49
23.18%
LII
Lennox International
546.82
69.40
14.54%
Orion Energy Systems Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -10.84% | Next Earnings Date: Jun 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in new contracts and margin improvements, balanced by revenue declines and project timing challenges. There is potential for future growth, but current headwinds and uncertainties persist.Highlights
New LED Contracts and Revenue Potential
Orion Energy Systems has landed 7 new LED lighting contracts with potential revenue of $100 million to $200 million over the next 5 years.
Improvement in Gross Margin
Orion's Q3 '25 blended gross margin improved 490 basis points to 29.4%, marking the second highest quarterly rate in 7 years.
Voltrek EV Charging Growth
Revenue from the EV Charging segment is up 48% year-to-date, with expectations of continued growth in fiscal '26.
Reorganization for Enhanced Focus
Orion is reorganizing its business into two commercial business units to enhance customer service and streamline operating overhead.
Reduction in Breakeven Point
Orion reduced its annual breakeven point by at least 20% to $78 million to $85 million, down from $105 million to $115 million over the past 2 years.
Lowlights
Revenue Decline
Q3 '25 revenue was $19.6 million, down from $26 million in Q3 '24, impacted by project delays and economic uncertainties.
Project Timing Challenges
Delays in customer project starts affected revenue, particularly in LED and EV charging projects, contributing to a reduced fiscal '25 revenue outlook.
Federal Funding Uncertainty
The new administration's halt on disbursements under the $5 billion Electric Vehicle Infrastructure Act creates uncertainty in Orion's EV Charging business growth.
Decrease in Maintenance Revenue
Maintenance services revenue decreased due to the intentional loss of large unprofitable customers, despite improved gross margin.
Company Guidance
During Orion Energy Systems' Fiscal 2025 Third Quarter Conference Call, the company outlined several key metrics and strategic initiatives aimed at improving future performance. Despite a disappointing revenue outcome for Q3, Orion reported securing seven new LED lighting contracts with a potential revenue impact of $100 million to $200 million over five years. The company achieved a significant improvement in its total Q3 '25 blended gross margin, increasing by 490 basis points to 29.4%, marking the second-highest quarterly rate in seven years. Orion has also successfully reduced its annual breakeven point by 20%, now ranging between $78 million and $85 million, down from the previous $105 million to $115 million. The company's Voltrek EV Charging Solutions business saw a 48% year-to-date revenue increase, and Orion anticipates continued growth in this sector, despite uncertainties surrounding federal funding. Additionally, Orion's Electrical Maintenance business achieved a substantial gross margin increase of over 2,000 basis points to 26.4% in Q3 '25. Looking ahead, Orion projects Q4 revenue in the range of $19 million to $25 million and expressed confidence in achieving double-digit revenue growth and positive adjusted EBITDA for fiscal 2026.Orion Energy Systems Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Orion Energy Systems Implements Cost-Saving Salary Reductions
Neutral
Feb 11, 2025
On February 11, 2024, Orion Energy Systems announced voluntary salary and retainer reductions for its executive officers and board members as part of temporary cost-saving measures. The company also reported improved financial results for the fiscal 2025 third quarter, including a gross margin increase to 29.4%, reduced net loss, and break-even adjusted EBITDA. Orion’s reorganization into two business units aims to enhance sales and marketing effectiveness, aligning with its focus on long-term growth. Despite lowering its FY 2025 revenue outlook due to project delays and market conditions, Orion’s strategic moves, such as cost reduction and business realignment, position it for better performance in FY 2026.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.