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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on OESX

Orion Energy Systems' recent performance was negatively impacted by a Q3 loss of $0.05 per share, lagging revenue estimates. The company's gross margin improved to 29.4%, but this was not enough to offset reduced net loss and break-even adjusted EBITDA. Additionally, the company reduced its FY 2025 revenue outlook, citing challenges in the market. Furthermore, the recent appointment of a new CEO, Sally Washlow, may indicate a change in leadership and potentially a shift in the company's strategy.

1.c. Company Highlights

2. Orion Energy Systems' Q3 2026 Earnings: A Step Closer to Profitable Growth

Orion Energy Systems reported a revenue of $21.1 million for Q3 2026, marking an 8% increase from Q3 2025. The company's LED lighting segment contributed $12.1 million to the revenue, while EV charging solutions generated $4.7 million. The gross margin expanded to 30.9% from 29.4% in Q3 2025, indicating improved operational efficiency. Adjusted EBITDA was $761,000, representing the company's fifth consecutive quarter of positive adjusted EBITDA. The actual EPS came out at $0.04, beating estimates of -$0.18.

Publication Date: Mar -08

📋 Highlights
  • Q3 2026 Revenue Growth:: Revenue reached $21.1 million, an 8% increase from $19.5 million in Q3 2025.
  • Gross Margin Improvement:: Rose to 30.9% in Q3 2026 from 29.4% in Q3 2025.
  • Adjusted EBITDA:: Recorded $761,000, marking five consecutive quarters of positive adjusted EBITDA.
  • 2026 Revenue Outlook Raised:: Revised to $84–86 million, up from prior $84 million guidance, with positive adjusted EBITDA.
  • 2027 Growth Projections:: Anticipates $95–97 million revenue and positive adjusted EBITDA, driven by EV charging and industrial facility projects.

Segment Performance

The maintenance segment revenue increased by 13% to $4.4 million in Q3 2026 from $3.9 million in Q3 2025, driven by new customer contracts and the expansion of existing relationships. The company's growth is driven by increasing orders and the success of its recent cost structure improvements. Orion sees opportunities in building, reshoring, and refurbishing industrial facilities, as well as in EV fast charging.

Outlook and Guidance

Orion raised its fiscal 2026 outlook to a range of $84 million to $86 million in revenue at positive adjusted EBITDA, up from its previous outlook of $84 million in revenue at or approaching positive adjusted EBITDA. The company expects continued profitable growth in fiscal 2027 with positive adjusted EBITDA on revenue between $95 million and $97 million. As Sally Washlow mentioned, the company's strategy is to expand its scope of work within its current customer base and develop new products and services to meet customer needs.

Valuation and Liquidity

Orion's available financial liquidity was $11.8 million at Q3 2026, and the company recently raised net proceeds of approximately $6.4 million through the issuance of 500,000 shares of common stock. With a P/S Ratio of 0.45, the stock appears to be reasonably valued. However, the EV/EBITDA ratio stands at 3051.03, indicating that the market has high expectations for the company's future growth. Analysts estimate next year's revenue growth at 13.3%, which may justify the current valuation to some extent.

3. NewsRoom

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Orion/Voltrek to Participate in Three Prominent Industry Events in May

Apr -29

Source: globenewswire.com

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Orion Reiterates Expectations for Increased Growth and Profitability in FY 2026 and FY 2027; Strong Profitable Growth Drive Highlights Sally Washlow's First Year as CEO

Apr -15

Source: globenewswire.com

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Orion to Exhibit at LEDucation 2026

Apr -02

Source: globenewswire.com

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Orion Selected by Seven Customers for $21M in Electrical Contracting Engagements

Mar -24

Source: globenewswire.com

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Orion/Voltrek Embarks on $10M in EV Charging Deployments; More than 80 U.S. Installations Range from the Northeast to the Carolinas to California

Mar -17

Source: globenewswire.com

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Orion Energy Systems, Inc. (NASDAQ:OESX) Sees Large Increase in Short Interest

Mar -13

Source: defenseworld.net

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Orion Announces $3.6M Electrical Infrastructure and LED Lighting Engagement for Global Testing Services Leader

Mar -03

Source: globenewswire.com

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Short Interest in Orion Energy Systems, Inc. (NASDAQ:OESX) Grows By 85.7%

Mar -02

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.19%)

6. Segments

Services Group

Expected Growth: 12%

Orion Energy Systems' Services Group growth is driven by increasing demand for energy-efficient solutions, government incentives for sustainable infrastructure, and rising adoption of IoT-enabled building management systems. Additionally, the group's expansion into new markets, strategic partnerships, and investments in digital technologies are contributing to its 12% growth.

United States Markets

Expected Growth: 10%

Orion Energy Systems, Inc. in the United States Markets is driven by increasing adoption of energy-efficient solutions, growing demand for LED lighting, and rising awareness about environmental sustainability. Additionally, government incentives and tax credits for energy-efficient projects, as well as the need for cost savings and reduced carbon footprint, contribute to the 10% growth rate.

Distribution Services

Expected Growth: 13%

Orion Energy Systems' Distribution Services segment growth of 13% is driven by increasing demand for energy-efficient solutions, expansion into new markets, and strategic partnerships. Additionally, the rising adoption of IoT and smart building technologies, as well as growing concerns about energy consumption and sustainability, contribute to the segment's growth.

Electric Vehicle Charging System

Expected Growth: 18%

Increasing adoption of electric vehicles driven by government incentives, declining battery costs, and growing environmental concerns. Orion Energy Systems' charging solutions cater to commercial and industrial customers, benefiting from rising demand for fast-charging infrastructure. Expanding partnerships with automakers, utilities, and property owners further fuels growth.

7. Detailed Products

LED Lighting

Energy-efficient LED lighting solutions for commercial and industrial applications

Intelligent Controls

Advanced lighting control systems that integrate with building management systems to optimize energy usage

Solar LED Lighting

Solar-powered LED lighting solutions for outdoor applications, such as parking lots, roadways, and security lighting

Energy Storage Systems

Energy storage solutions that optimize energy usage and reduce peak demand charges

Electrical Infrastructure

Design, installation, and maintenance of electrical infrastructure for commercial and industrial facilities

8. Orion Energy Systems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Orion Energy Systems, Inc. faces moderate threat from substitutes due to the availability of alternative energy sources such as solar and wind power.

Bargaining Power Of Customers

Orion Energy Systems, Inc. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Orion Energy Systems, Inc. relies on a few key suppliers for its components, which gives them some bargaining power.

Threat Of New Entrants

The energy industry is highly competitive, and new entrants can easily enter the market, posing a significant threat to Orion Energy Systems, Inc.

Intensity Of Rivalry

The energy industry is highly competitive, and Orion Energy Systems, Inc. faces intense rivalry from established players and new entrants.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.16%
Debt Cost 3.95%
Equity Weight 76.84%
Equity Cost 11.16%
WACC 9.49%
Leverage 30.14%

11. Quality Control: Orion Energy Systems, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Microvast

A-Score: 4.2/10

Value: 5.7

Growth: 5.6

Quality: 3.3

Yield: 0.0

Momentum: 10.0

Volatility: 0.7

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Orion Energy Systems

A-Score: 4.2/10

Value: 8.0

Growth: 2.9

Quality: 2.6

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

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SKYX

A-Score: 3.9/10

Value: 6.8

Growth: 4.0

Quality: 3.0

Yield: 0.0

Momentum: 8.5

Volatility: 1.0

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Dragonfly Energy

A-Score: 3.6/10

Value: 10.0

Growth: 1.0

Quality: 5.6

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

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Plug Power

A-Score: 2.9/10

Value: 7.9

Growth: 1.2

Quality: 3.4

Yield: 0.0

Momentum: 4.5

Volatility: 0.3

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FuelCell Energy

A-Score: 2.7/10

Value: 9.4

Growth: 1.1

Quality: 3.8

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

556.63$

Current Price

9.1$

Potential

6016.72%

Expected Cash-Flows