Willdan Group Hits 52-week High - Analyst Blog

On Jun 23, Willdan Group, Inc. WLDN hit a new 52-week high of $8.60 per share. The momentum in the share price was driven by the company's strong fundamentals and the recent revelation of its 3-year financial targets.  The stock has been on an uptrend, gaining more than 15% since it announced its 3-year targets on Jun 20.

Further, the company's diversified business, diligent operational execution, cost-reduction initiatives and strong cash and balance sheet have positioned the company well to benefit from the growing demand for outsourced services and booming energy industry across the globe. In the last 1-year period, the stock gained over 204%.

Driven by the continued strength in its Engineering Services and Energy Efficiency Services coupled with its strong fundamentals, Willdan provided an encouraging outlook for the 3-year period. The company anticipates the contract revenue to grow by about 15% each year, whereas gross margin is expected to lie between 40%–45%. The company has also forecasted its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin in the band of 5% to 10%.

On May 8, the company had reported strong first-quarter 2014 results with earnings of 17 cents a share surpassing both the Zacks Consensus Estimate and the prior-year earnings of 5 cents by 240%. The company's total contract revenues also grew about 6% year over year to $22.7 million.

Moreover, Willdan has a pristine balance sheet with cash and cash equivalents of $12.7 million as on Mar 28, 2014 and no debt. This strong financial position facilitates sufficient liquidity to drive organic growth and pursue strategic acquisitions.

The Zacks Consensus Estimate for 2014 is currently pegged at 64 cents per share, reflecting year-over-year growth of 82.86%.

At present, Willdan sports a Zacks Rank #1 (Strong Buy). Investors interested in this sector could also consider some other stocks like Enersys Inc. ENS, AO Smith Corp. AOS and Quanta Services, Inc. PWR. While Enersys has the same Zacks Rank as Willdan, both AO Smith and Quanta Services carry a Zacks Rank #2 (Buy).

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