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Orion Energy Systems (OESX)
NASDAQ:OESX
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Orion Energy Systems (OESX) AI Stock Analysis

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OESX

Orion Energy Systems

(NASDAQ:OESX)

Rating:57Neutral
Price Target:
$7.50
▲(1.63% Upside)
Orion Energy Systems faces significant financial challenges, with declining revenues and increased leverage. However, technical indicators show positive momentum, and the earnings call suggests potential for improvement. Valuation remains a concern due to ongoing losses. The company's strategic initiatives and shareholder support provide some optimism for future performance.
Positive Factors
Financial Performance
The company was able to deliver a third consecutive quarter of positive adjusted EBITDA.
Gross Margins
Gross margins for F1Q26 improved to 30.1%, compared to 21.6% in F1Q25, as a result of improvements in pricing, revenue mix, and costs across all three segments.
Policy and Regulation
Orion stands to benefit from the focus on the current administration on American manufacturing; the company’s products are Build America Act (BAA) compliant.
Negative Factors
Market Conditions
Orion Energy's F3Q25 revenues were impacted by delayed LED lighting projects and general market softness reflecting customer uncertainty concerning the economy.
Revenue Impact
Revenues were impacted by a weak EV charging solutions revenue of $2.7M, down from $5.8M in F4Q25.
Supply Chain and Tariffs
Orion Energy now has less exposure to China-related supply chain issues, though tariffs on Mexico-related supply chain and metals could still impact results.

Orion Energy Systems (OESX) vs. SPDR S&P 500 ETF (SPY)

Orion Energy Systems Business Overview & Revenue Model

Company DescriptionOrion Energy Systems, Inc. researches, designs, develops, manufactures, markets, sells, installs, and implements energy management systems for commercial office and retail, exterior area lighting, and industrial applications in North America. The company operates through three segments: Orion Services Group, Orion Distribution Services, and Orion U.S. Markets. It offers interior light emitting diode (LED) high bay fixtures; smart building control systems, which provide lighting control options and data intelligence capabilities for building managers; and LED troffer door retrofit for use in office or retail grid ceilings. The company also offers various other LED and HIF fixtures for lighting and energy management needs comprising fixtures for agribusinesses, parking lots, roadways, retail, mezzanine, outdoor applications, and private label resale. In addition, it provides maintenance, repair, and replacement services; offers lighting-related energy management services, such as site assessment, site field verification, utility incentive and government subsidy management, engineering design, project management, installation, facility design commissioning, and recycling; and sells and distributes replacement lamps and fixture components into the after-market. The company serves customers directly and through independent sales agencies and distributors, national account end-users, federal and state government facilities, regional account end-users, electrical distributors, electrical contractors, and energy service companies. Orion Energy Systems, Inc. was incorporated in 1996 and is headquartered in Manitowoc, Wisconsin.
How the Company Makes MoneyOrion Energy Systems generates revenue through several key streams: the sale of LED lighting products, energy efficiency services, and solar energy solutions. The company earns money by selling its proprietary lighting systems directly to customers and through partnerships with distributors and contractors. Additionally, Orion offers energy consulting services, conducting audits and evaluations to recommend optimal energy solutions. The company also benefits from various government and utility incentives aimed at promoting energy efficiency, which can enhance customer adoption of its products. Significant partnerships with energy companies and participation in renewable energy programs further contribute to its earnings, allowing it to expand its market reach and drive sales.

Orion Energy Systems Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q1-2026)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a cautiously optimistic outlook, with improvements in gross profit margins, reduced net loss, and segment-specific growth. However, overall revenue decline and challenges in the EV charging segment, along with reduced liquidity, present concerns. The company is actively pursuing growth opportunities and cost reductions to counterbalance these issues.
Q1-2026 Updates
Positive Updates
Gross Profit Margin Increase
Overall gross profit margin increased by 850 basis points to 30.1% in Q1 '26 from 21.6% in Q1 '25, due to pricing and cost improvements in all segments, particularly LED lighting and maintenance.
Improved Financial Performance
Net loss improved to $1.2 million in Q1 '26 from $3.8 million in Q1 '25. Adjusted EBITDA improved to positive $0.2 million in Q1 '26 from negative $1.8 million in Q1 '25.
LED Lighting and Electrical Maintenance Growth
LED lighting segment revenue increased by 1% to $12.9 million, and Electrical Maintenance segment revenue increased by 21% to $4 million in Q1 '26 from Q1 '25.
Cost Reductions
Total operating expenses declined to $6.9 million in Q1 '26 from $7.7 million in Q1 '25, due to overhead and personnel expense reductions.
Public School Bus Project
Commencement of a $3 million public school bus project, with expected completion in Q2 '26, indicating future revenue improvement.
Negative Updates
Revenue Decline
Fiscal Q1 '26 revenue was $19.6 million, down from $19.9 million in Q1 '25, with particular challenges in the EV charging solutions segment.
EV Charging Solutions Revenue Drop
EV charging solutions revenue decreased to $2.7 million in Q1 '26 from $3.8 million in Q1 '25, due to expected timing variability of larger projects.
Liquidity Decline
Available financial liquidity decreased to $9.8 million in Q1 '26 from $13 million at year-end.
Company Guidance
During the call, Orion Energy Systems provided guidance for fiscal year 2026, highlighting several key financial metrics and strategic initiatives. The company expects to achieve $84 million in revenue by the end of the fourth quarter, with a positive adjusted EBITDA for the full fiscal year. In the first quarter of fiscal '26, Orion reported revenue of $19.6 million, a slight decrease from $19.9 million in the same period last year. The gross profit margin improved significantly to 30.1%, up from 21.6% in Q1 '25, due to pricing and cost improvements across all segments. Operating expenses were reduced by 10.6% to $6.9 million, contributing to a narrowing of the net loss to $1.2 million, compared to $3.8 million in Q1 '25. Orion's LED lighting segment saw a 1% revenue increase, while the electrical maintenance segment grew by 21%. Despite a decrease in EV charging solutions revenue, the company anticipates sequential revenue improvements in Q2 '26, bolstered by projects like the $6.5 million Boston Public Schools contract. Looking ahead, Orion is focused on market leadership in LED lighting, EV charging, and electrical infrastructure, with a strategic emphasis on growth, profitability, and market penetration to capitalize on the robust pipeline and favorable industry trends.

Orion Energy Systems Financial Statement Overview

Summary
Orion Energy Systems is facing significant financial challenges, with declining revenues and profitability issues. The balance sheet shows increased leverage, which could pose risks if not managed properly. While there is some improvement in cash flow, the overall financial health of the company remains weak, requiring strategic adjustments to improve performance and stability.
Income Statement
45
Neutral
Orion Energy Systems has experienced a significant decline in revenue, with a TTM revenue growth rate of -41.5%. The gross profit margin is relatively stable at 27.5%, but the company is struggling with profitability, as indicated by negative net profit and EBIT margins. This suggests challenges in managing costs and achieving operational efficiency.
Balance Sheet
40
Negative
The company's debt-to-equity ratio has increased to 1.10, indicating higher leverage and potential financial risk. The return on equity is negative, reflecting ongoing losses. The equity ratio is not explicitly calculated, but the increasing debt levels and declining equity suggest a weakening financial position.
Cash Flow
50
Neutral
There is a notable improvement in free cash flow, with a growth rate of 489.1% in the TTM period. However, the operating cash flow to net income ratio remains low, indicating that cash generation from operations is still a concern. The free cash flow to net income ratio is relatively high, suggesting better cash management despite profitability issues.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue79.39M79.72M90.58M77.38M124.38M116.84M
Gross Profit21.86M20.24M20.91M17.51M33.91M30.12M
EBITDA-5.97M-8.32M-8.29M-14.03M9.93M8.18M
Net Income-9.29M-11.80M-11.67M-34.34M6.09M26.13M
Balance Sheet
Total Assets49.02M52.46M63.17M71.58M86.82M92.82M
Cash, Cash Equivalents and Short-Term Investments3.56M5.97M5.16M15.99M14.47M19.39M
Total Debt11.92M10.32M12.11M10.02M35.00K49.00K
Total Liabilities38.21M40.58M40.63M38.33M21.72M34.75M
Stockholders Equity10.81M11.88M22.54M33.25M65.10M58.07M
Cash Flow
Free Cash Flow2.91M494.00K-10.93M-2.89M-641.00K776.00K
Operating Cash Flow3.05M599.00K-10.09M-2.29M-113.00K1.73M
Investing Cash Flow97.00K128.00K-731.00K-6.20M-4.92M-946.00K
Financing Cash Flow-5.27M90.00K-14.00K10.01M104.00K-10.14M

Orion Energy Systems Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.38
Price Trends
50DMA
6.33
Positive
100DMA
6.53
Positive
200DMA
7.28
Positive
Market Momentum
MACD
0.29
Negative
RSI
62.31
Neutral
STOCH
74.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OESX, the sentiment is Positive. The current price of 7.38 is above the 20-day moving average (MA) of 6.75, above the 50-day MA of 6.33, and above the 200-day MA of 7.28, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 62.31 is Neutral, neither overbought nor oversold. The STOCH value of 74.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OESX.

Orion Energy Systems Risk Analysis

Orion Energy Systems disclosed 41 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
64
Neutral
$10.75B15.577.24%2.01%2.80%-14.32%
59
Neutral
$42.72M-43.18%-19.60%-483.35%
57
Neutral
$25.56M-62.16%-14.52%-4.40%
55
Neutral
2.57%83.28%
43
Neutral
$19.66M-207.48%-16.98%2.43%
26
Underperform
$254.36M-860.70%25.87%
$7.81M-4.77%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OESX
Orion Energy Systems
7.38
-1.22
-14.19%
SVT
Servotronics
46.94
35.20
299.83%
PPSI
Pioneer Power Solutions
3.81
0.59
18.32%
GWH
ESS Tech
1.34
-4.51
-77.09%
SDST
Stardust Power
2.93
-88.67
-96.80%
RAYA
Erayak Power Solution Group Incorporation Class A
0.04
-0.63
-94.03%

Orion Energy Systems Corporate Events

Shareholder MeetingsStock Split
Orion Energy Systems Approves Reverse Stock Split
Neutral
Aug 19, 2025

On August 7, 2025, Orion Energy Systems‘ shareholders approved a 1-for-10 reverse stock split of the company’s common stock, which was implemented on August 22, 2025. This move, intended to increase the stock’s bid price and maintain its Nasdaq listing, reduced the number of outstanding shares from approximately 35.2 million to 3.5 million, while also adjusting all related securities proportionally.

Executive/Board ChangesShareholder MeetingsStock Split
Orion Energy Systems Holds Annual Shareholder Meeting
Positive
Aug 8, 2025

On August 7, 2025, Orion Energy Systems held its Annual Meeting of Shareholders, where key proposals were voted on. Shareholders elected two directors, approved executive compensation, ratified BDO USA, P.C. as the independent public accountant, and approved a reverse stock split and a special stock option grant for the new CEO. These decisions reflect strong shareholder support and are expected to impact the company’s strategic direction and financial structure positively.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 26, 2025