Orion Energy Systems (OESX) AI Stock Analysis

• Market Cap: $20.55M
• Dividend Yield: N/A
• Average Volume (3M): 110.11K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• Revenue Growth: -0.63%
• EPS Growth: 60.93%
• Country: US
• Employees: 260
• Sector: Industrials
• Sector Strength: 86
• Industry: Electrical Equipment & Parts
• EPS (TTM): -0.09
• Shares Outstanding: 33,688,164
• 10 Day Avg. Volume: 132,651
• 30 Day Avg. Volume: 110,111
• PEG Ratio: -0.32
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.96
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 0.06
• Enterprise Value/Gross Profit: 1.03
• Enterprise Value/Ebitda: -1.00
• 1Y Price Target: $2.00
• Price Target Upside: 227.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 54 Neutral
• 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 Business Overview & Revenue Model

Company Description

Orion 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 Money

Orion 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.

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.

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.

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
EBITDA	-3.81M	-8.29M	-14.03M	9.93M	8.18M	14.61M
Net Income	-7.28M	-11.67M	-34.34M	6.09M	26.13M	12.46M
Balance Sheet
Total Assets	73.67M	63.17M	71.58M	86.82M	92.82M	72.56M
Cash, Cash Equivalents and Short-Term Investments	12.28M	5.16M	15.99M	14.47M	19.39M	28.75M
Total Debt	3.50M	12.11M	10.02M	35.00K	49.00K	10.10M
Total Liabilities	37.88M	40.63M	38.33M	21.72M	34.75M	41.53M
Stockholders Equity	35.79M	22.54M	33.25M	65.10M	58.07M	31.04M
Cash Flow
Free Cash Flow	1.45M	-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

• Technical Analysis Sentiment: Neutral
• Last Price: 0.61
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	71 Outperform	¥254.55B	13.00	8.49%	3.09%	6.31%	12.77%
SVT	55 Neutral	$120.00M	191.79	-4.18%	―	2.57%	83.28%
PPSI	55 Neutral	$30.53M	―	-43.18%	―	-19.60%	-483.35%
OESX	54 Neutral	$20.55M	―	-68.57%	―	-0.63%	60.93%
GWH	42 Neutral	$21.06M	―	-172.05%	―	-58.05%	-6.90%
SDST	26 Underperform	$12.57M	―	-860.70%	―	―	-12310.81%
RAYA		$117.09M	―	-4.77%	―	―	―

Orion Energy Systems Corporate Events

Orion Energy Systems Implements Cost-Saving Salary Reductions

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.