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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 Posts Strong Q2 with Gross Margin Expansion

Orion Energy Systems reported fiscal Q2 '26 revenue of $19.9 million, a modest increase from $19.4 million in Q2 '25, with two of its three segments growing year-over-year. The company's gross margin expanded significantly to 31% from 23.1% in Q2 '25, driven by pricing and cost improvements across all segments, particularly in LED lighting and maintenance. The LED lighting segment achieved a gross margin of 27.5% versus 25.4% in Q2 '25. The company reported an adjusted EPS loss of -$0.17, beating estimates of -$0.72.

Publication Date: Nov -29

📋 Highlights
  • Gross Profit Surge:: Q2 gross profit reached 31%, up over 1/3 from Q2 '25, driven by cost reductions and margin gains in LED lighting and maintenance services.
  • Revenue Growth Maintained:: Total revenue rose to $19.9M in Q2 '26, with two of three segments growing YoY despite a 2% decline in LED lighting segment revenue.
  • Adjusted EBITDA Momentum:: Fourth consecutive quarter of positive adjusted EBITDA, with full-year EBITDA potentially approaching breakeven at $80M–$83M revenue.
  • Operating Cost Reduction:: Operating expenses dropped to $6.4M from $7.7M YoY, reflecting overhead cuts and the absence of prior earnout expenses.
  • EV Charging Recovery:: EV charging segment stabilized, with revenue expected to stabilize at ~$4.8M for the next two quarters after earlier sector-wide uncertainty.

Segment Performance

The LED lighting segment revenue decreased 2% to $10.7 million, reflecting increased project activity and distribution channel sales, offset by lower ESCO channel sales. The maintenance services business saw significant growth, driven by both margin and volume increases. As Sally Washlow mentioned, "We recorded incremental growth in total revenue and significantly more than that in maintenance services, even as we unburdened ourselves of an unprofitable contract."

Cost Control and Guidance

Total operating expenses declined to $6.4 million in Q2 '26 from $7.7 million in Q2 '25, reflecting ongoing overhead and personnel expense reductions. The company reiterated its fiscal '26 revenue growth expectation of 5% to approximately $84 million and expects to approach or achieve positive adjusted EBITDA for the full fiscal year. Analysts estimate next year's revenue growth at 4.3%.

Valuation and Outlook

With a P/S Ratio of 0, the stock appears to be priced based on other metrics. The EV/EBITDA ratio stands at 1469.02, indicating a high expectations for future EBITDA growth. The company's efforts to control costs and improve profitability are evident, and the expected revenue growth is likely to drive the stock's performance. As John Brodin noted, "We have rightsized the business to be at or above breakeven at $80 million to $83 million of revenue," indicating a positive outlook for the company's future performance.

3. NewsRoom

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Wall Street Analysts Believe Orion Energy Systems (OESX) Could Rally 26.36%: Here's is How to Trade

Nov -26

Source: zacks.com

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Wall Street Analysts See a 75.15% Upside in Orion Energy Systems (OESX): Can the Stock Really Move This High?

Nov -10

Source: zacks.com

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Orion to Participate in Craig-Hallum Alpha Select Conference on November 18, 2025

Nov -06

Source: globenewswire.com

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Orion Energy Systems, Inc. (OESX) Q2 2026 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Orion Energy Systems, Inc. (OESX) Reports Q2 Loss, Misses Revenue Estimates

Nov -05

Source: zacks.com

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Orion Announces $4.7M in LED Lighting Engagements for Two Major Enterprise Customers; One Scope of Work Marks the Start of a Multi-Year Initiative

Oct -28

Source: globenewswire.com

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LED Lighting, EV Charging Station, and Maintenance Solutions Provider Orion Hosts Q2 Investor Call Wed., Nov. 5th at 10am ET

Oct -14

Source: globenewswire.com

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LED Lighting and EV Charging Station Provider Orion to Present at the LD Micro Main Event Investor Conference, Oct. 21st at 9:30am PT

Oct -07

Source: newsfilecorp.com

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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FuelCell Energy

A-Score: 4.5/10

Value: 9.2

Growth: 3.7

Quality: 3.8

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

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Microvast

A-Score: 4.0/10

Value: 4.8

Growth: 5.6

Quality: 3.2

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

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Dragonfly Energy

A-Score: 3.8/10

Value: 9.4

Growth: 2.9

Quality: 5.5

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

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Plug Power

A-Score: 3.4/10

Value: 7.4

Growth: 1.2

Quality: 3.4

Yield: 0.0

Momentum: 8.0

Volatility: 0.3

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Orion Energy Systems

A-Score: 3.4/10

Value: 7.8

Growth: 2.9

Quality: 3.2

Yield: 0.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

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SKYX

A-Score: 3.1/10

Value: 7.0

Growth: 4.0

Quality: 3.0

Yield: 0.0

Momentum: 3.5

Volatility: 1.3

1-Year Total Return ->

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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

580.96$

Current Price

16.94$

Potential

3329.51%

Expected Cash-Flows