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Orion Energy Systems (OESX)
NASDAQ:OESX

Orion Energy Systems (OESX) AI Stock Analysis

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Orion Energy Systems

(NASDAQ:OESX)

Rating:54Neutral
Price Target:
Orion Energy Systems faces notable financial challenges, with declining revenue and profitability impacting its overall health. However, recent earnings call insights provide some optimism, showcasing new contracts and improved margins. While technical analysis offers modest positive signals, valuation remains unattractive due to the lack of profitability. The outlook is mixed, with potential for recovery balanced by significant current headwinds.
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
Delayed Projects
Orion Energy's F3Q25 revenues were impacted by delayed LED lighting projects and general market softness reflecting customer uncertainty concerning the economy.
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.

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 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 Earnings Call Summary

Earnings Call Date:Jun 26, 2025
(Q4-2025)
|
% Change Since: 3.39%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed picture with significant achievements in the EV charging business and cost reductions balanced by challenges in the lighting segment and a decline in overall revenue, resulting in a slight net loss for the fiscal year.
Q4-2025 Updates
Positive Updates
Strong Growth in EV Charging Business
The Voltrek electric vehicle charging station solutions business achieved 37% growth in revenue, with improved gross margins of 28.3% in FY '25 compared to 27.2% in FY '24.
Cost Reductions and Improved Margins
Meaningful reductions in the cost of LED lighting fixtures and operating overheads by more than $4 million in FY '25, with further reductions planned in FY '26, leading to increased gross profit margins.
Business Reorganization for Growth
Reorganized into two commercial business units, Solutions and Partners, to better capitalize on strengths and optimize success across LED lighting, EV charging, and electrical maintenance.
Positive Adjusted EBITDA
Achieved positive adjusted EBITDA in both Q3 and Q4, along with positive operating cash flow for the full fiscal year.
Negative Updates
Decline in Overall Revenue
Fiscal '25 revenues were $79.7 million, down from $90.6 million in fiscal '24, with LED lighting revenue trailing prior year periods by 33% in Q4 '24 and 22% for the full year.
Challenges in Lighting Segment
Lighting segment revenue remained challenged in FY '25, with reduced major project activity and product demand impacting revenue.
Net Loss for Fiscal '25
Net loss increased slightly to $11.8 million or $0.36 per share compared to a net loss of $11.7 million or $0.36 per share in fiscal '24.
Company Guidance
During the call, Orion Energy Systems provided guidance for fiscal year 2026, with a revenue outlook of approximately 5% growth, targeting around $84 million. The company achieved positive adjusted EBITDA in both Q3 and Q4 of fiscal 2025, despite a decline in annual revenue from $90.6 million in fiscal 2024 to $79.7 million in fiscal 2025. Orion's CEO, Sally Washlow, highlighted a 37% revenue growth in the Voltrek electric vehicle charging station solutions business and improvements in the electrical maintenance segment's profitability. The company reduced operating overheads by over $4 million in fiscal 2025, with an additional $1.5 million in annual reductions planned for fiscal 2026. Gross margins improved to 27.5% in Q4 2025, up from 25.8% in fiscal 2024. Orion is reorganizing into two business units, Solutions and Partners, to better leverage its capabilities, with the Solutions unit focusing on LED lighting, EV charging, and maintenance services, while the Partners unit targets sales through distribution channels. Despite challenges, Orion remains committed to optimizing its strengths and achieving growth and profitability goals.

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
35
Negative
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.
Balance Sheet
50
Neutral
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.
Cash Flow
40
Negative
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.
BreakdownTTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income Statement
Total Revenue85.26M90.58M77.38M124.38M116.84M150.84M
Gross Profit21.53M20.91M17.51M33.91M30.12M37.12M
EBITDA-3.81M-8.29M-14.03M9.93M8.18M14.61M
Net Income-7.28M-11.67M-34.34M6.09M26.13M12.46M
Balance Sheet
Total Assets73.67M63.17M71.58M86.82M92.82M72.56M
Cash, Cash Equivalents and Short-Term Investments12.28M5.16M15.99M14.47M19.39M28.75M
Total Debt3.50M12.11M10.02M35.00K49.00K10.10M
Total Liabilities37.88M40.63M38.33M21.72M34.75M41.53M
Stockholders Equity35.79M22.54M33.25M65.10M58.07M31.04M
Cash Flow
Free Cash Flow1.45M-10.93M-2.89M-641.00K776.00K19.40M
Operating Cash Flow1.47M-10.09M-2.29M-113.00K1.73M20.34M
Investing Cash Flow153.00K-731.00K-6.20M-4.92M-946.00K-936.00K
Financing Cash Flow904.00K-14.00K10.01M104.00K-10.14M615.00K

Orion Energy Systems Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price0.61
Price Trends
50DMA
0.66
Negative
100DMA
0.72
Negative
200DMA
0.79
Negative
Market Momentum
MACD
-0.01
Negative
RSI
48.06
Neutral
STOCH
27.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OESX, the sentiment is Neutral. The current price of 0.61 is above the 20-day moving average (MA) of 0.59, below the 50-day MA of 0.66, and below the 200-day MA of 0.79, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 48.06 is Neutral, neither overbought nor oversold. The STOCH value of 27.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (71)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
¥254.55B13.008.49%3.09%6.31%12.77%
SVSVT
55
Neutral
$120.00M191.79-4.18%2.57%83.28%
55
Neutral
$30.53M-43.18%-19.60%-483.35%
54
Neutral
$20.55M-68.57%-0.63%60.93%
GWGWH
42
Neutral
$21.06M-172.05%-58.05%-6.90%
26
Underperform
$12.57M-860.70%-12310.81%
$117.09M-4.77%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OESX
Orion Energy Systems
0.61
-0.41
-40.20%
SVT
Servotronics
46.94
35.78
320.61%
PPSI
Pioneer Power Solutions
2.74
-0.45
-14.11%
GWH
ESS Tech
1.74
-10.43
-85.70%
SDST
Stardust Power
0.21
-9.53
-97.84%
RAYA
Erayak Power Solution Group Incorporation Class A
2.60
1.74
202.33%

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
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: May 03, 2025