Willdan Group (WLDN) AI Stock Analysis

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Willdan Group

(NASDAQ:WLDN)

71Outperform

Willdan Group scores 71, reflecting a strong financial performance with consistent revenue and profit growth. The positive guidance from the earnings call further supports its growth trajectory. However, technical analysis indicates some short-term bearish trends, and the valuation suggests moderate pricing relative to growth expectations. The absence of a dividend yield is a minor downside. Overall, the company's strategic initiatives and financial health present a promising outlook, tempered by some technical and valuation concerns.

Willdan Group (WLDN) vs. S&P 500 (SPY)

Market Cap

$544.88M

Dividend YieldN/A

Average Volume (3M)136.81K

Price to Earnings (P/E)23.9

Beta (1Y)0.49

Revenue Growth10.92%

EPS Growth100.59%

CountryUS

Employees1,761

SectorIndustrials

Sector Strength64

IndustryEngineering & Construction

Share Statistics

EPS (TTM)1.58

Shares Outstanding14,497,156

10 Day Avg. Volume86,055

30 Day Avg. Volume136,809

Financial Highlights & Ratios

PEG Ratio0.24

Price to Book (P/B)N/A

Price to Sales (P/S)1.07

Price to Cash Flow (P/CF)4.50

P/FCF Ratio4.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$57.50

Price Target Upside50.44% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Willdan Group Business Overview & Revenue Model

Company DescriptionWilldan Group, Inc., together with its subsidiaries, provides professional, technical and consulting services primarily in the United States. It operates in two segments, Energy, and Engineering and Consulting. The Energy segment offers comprehensive audit and surveys, program design, master planning, demand reduction, grid optimization, benchmarking analyses, design engineering, construction management, performance contracting, installation, alternative financing, and measurement and verification services, as well as software and data analytics. The Engineering and Consulting segment provides building and safety, city engineering and code enforcement, development plan review and inspection, disaster recovery, geotechnical and earthquake engineering, planning and surveying, contract staff support, program and construction management, structural engineering, transportation and traffic engineering, and water resources services. This segment also offers district administration, financial consulting, and federal compliance services; and communications and technology services. It serves public and governmental agencies, including cities, counties, redevelopment agencies, water districts, school districts, and universities; investor and municipal owned energy utilities; state and federal agencies; and commercial and industrial firms, as well as various other special districts and agencies. The company was founded in 1964 and is headquartered in Anaheim, California.

How the Company Makes MoneyWilldan Group primarily generates revenue through contracts and projects with utilities, government agencies, and private sector clients. Its key revenue streams include energy efficiency services, engineering consulting, and software solutions. The company often enters into performance-based contracts, where it earns fees based on the successful implementation and measurable outcomes of energy savings projects. Additionally, Willdan benefits from strategic partnerships with utility companies and government programs that drive demand for its energy efficiency solutions and infrastructure services. These collaborations often result in long-term contracts, providing a stable revenue base for the company.

Willdan Group Financial Statement Overview

Summary

Willdan Group exhibits strong financial health with impressive revenue growth and profitability improvements. The balance sheet is stable with moderate leverage, and cash flows are robust, supporting ongoing operations and growth initiatives. Continued focus on operational efficiency and debt management will enhance financial performance further.

Income Statement

Positive

Willdan Group has demonstrated strong revenue growth with a 10.9% increase in the TTM period compared to the previous year, indicating a positive trajectory. The gross profit margin stands at 33.9%, reflecting efficient cost management. Net profit margin improved significantly to 4.0% in the TTM, showcasing enhanced profitability. However, the EBIT margin at 5.5% suggests some room for improvement in operational efficiency.

Balance Sheet

Positive

The company's balance sheet shows a stable equity position with a debt-to-equity ratio of 0.46, indicating moderate leverage. The return on equity (ROE) improved to 9.6% in the TTM, reflecting better utilization of equity capital. The equity ratio is at 50.4%, suggesting a balanced asset financing structure. Overall, the balance sheet reflects stability, though there is scope to further optimize debt levels.

Cash Flow

Positive

Willdan Group's cash flow statement shows healthy free cash flow growth of 11.1% in the TTM, indicating strong cash-generating capabilities. The operating cash flow to net income ratio is 1.71, suggesting robust cash conversion. The free cash flow to net income ratio of 1.44 further confirms the company's efficiency in translating earnings into cash flow. However, capital expenditures need careful management to sustain cash flow strength.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Mar 2021
Breakdown
Income Statement		Total Revenue
565.80M	510.10M	429.14M	353.75M	390.98M
	Gross Profit
202.78M	179.77M	143.58M	135.87M	129.39M
	EBIT
31.35M	22.07M	-6.12M	-8.54M	-14.60M
	EBITDA
49.23M	40.44M	11.37M	8.61M	4.14M
	Net Income Common Stockholders
22.57M	10.93M	-8.45M	-8.42M	-14.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
74.16M	23.40M	8.81M	11.22M	28.41M
	Total Assets
464.86M	415.59M	409.67M	394.42M	410.32M
	Total Debt
107.75M	114.10M	123.39M	118.23M	135.15M
	Net Debt
33.59M	90.70M	114.58M	107.01M	106.75M
	Total Liabilities
230.52M	215.74M	228.17M	215.20M	241.16M
	Stockholders Equity
234.34M	199.84M	181.50M	179.22M	169.16M
Cash Flow		Free Cash Flow
63.66M	29.29M	-169.00K	1.30M	41.95M
	Operating Cash Flow
72.07M	39.21M	9.43M	9.80M	47.02M
	Investing Cash Flow
-15.74M	-11.46M	-9.53M	-8.45M	-5.06M
	Financing Cash Flow
-5.57M	-23.84M	8.36M	-18.53M	-19.01M

Willdan Group Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price38.22

Price Trends

50DMA

37.68

Positive

100DMA

38.19

Positive

200DMA

38.87

Negative

Market Momentum

MACD

-0.31

Positive

RSI

47.45

Neutral

STOCH

34.96

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WLDN, the sentiment is Neutral. The current price of 38.22 is below the 20-day moving average (MA) of 39.02, above the 50-day MA of 37.68, and below the 200-day MA of 38.87, indicating a neutral trend. The MACD of -0.31 indicates Positive momentum. The RSI at 47.45 is Neutral, neither overbought nor oversold. The STOCH value of 34.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WLDN.

Willdan Group Risk Analysis

Willdan Group disclosed 43 risk factors in its most recent earnings report. Willdan Group 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

Willdan Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LMB	72 Outperform	$1.06B	36.27	22.50%	―	0.47%	43.12%
WLDN	71 Outperform	$544.88M	23.88	10.40%	―	10.92%	100.59%
AMRC	68 Neutral	$529.19M	9.46	5.92%	―	28.76%	-9.56%
GLDD	66 Neutral	$579.30M	10.48	13.73%	―	29.35%	309.98%
Sector *	63 Neutral	$4.26B	11.28	5.43%	215.24%	4.12%	-8.73%
BWMN	61 Neutral	$388.52M	157.71	1.34%	―	23.19%	―
MTRX	48 Neutral	$295.67M	―	-20.38%	―	-7.47%	-74.28%

* Industrials Sector Average

Performance Comparison

WLDN

Willdan Group

38.22

10.81

39.44%

AMRC

Ameresco

10.06

-10.92

-52.05%

GLDD

Great Lakes Dredge & Dock

9.06

1.87

26.01%

MTRX

Matrix Service Company

11.56

-0.21

-1.78%

LMB

Limbach Holdings

93.35

50.48

117.75%

BWMN

Bowman Consulting Group

22.41

-9.68

-30.17%

Willdan Group Earnings Call Summary

Earnings Call Date: Mar 6, 2025 | % Change Since: 18.62% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

Willdan Group, Inc. experienced a record-breaking year in 2024 with significant revenue growth, successful acquisitions, and strategic contract wins. The company maintains a strong cash flow and financial position, with a positive market outlook for 2025. However, the timing of revenue recognition from a major contract and the impact of prior exceptional opportunities created some challenges in comparing quarterly results. Overall, the highlights significantly outweigh the lowlights, indicating a strong positive sentiment.

Highlights

Record-Breaking Financial Performance

In 2024, contract revenue increased by 11% to a record $566 million, and adjusted EBITDA rose by 24% year over year. Adjusted EPS was up 39%, and free cash flow per share was $4.49.

Successful Strategic Acquisitions

Willdan Group, Inc. completed three acquisitions in 2024, including Enica and APG, which have expanded technical capabilities in the commercial technology sector, particularly in data center electricity.

Major Contract Wins

Willdan Group, Inc. won all major recompetes in 2024, including a $330 million, five-year contract with the Los Angeles Department of Water and Power, expected to drive significant future revenue.

Strong Cash Flow and Liquidity

The company generated $72 million in cash flow from operations and $64 million in free cash flow in 2024, resulting in a strong financial position with $124 million in total liquidity.

Positive Market Outlook

There is a robust pipeline of opportunities for 2025, with expected net revenue between $320 million to $330 million and adjusted EBITDA between $63 million to $67 million, both above current street estimates.

Lowlights

Impact of Previous Exceptional Opportunities

The fourth quarter of 2024 appeared flat or slightly lower compared to 2023 due to exceptional opportunities in the previous year, which contributed $20 million in contract revenue.

Delay in Revenue Recognition from LADWP Contract

The new contract with LADWP will not contribute significant revenue until the latter half of 2025 due to the timing of its ratification and startup.

Company Guidance

During the Willdan Group, Inc. fourth quarter and full-year 2024 earnings call, the company provided robust guidance for fiscal year 2025, reflecting strong financial performance and strategic growth initiatives. Willdan reported a significant 11% increase in contract revenue and a 24% rise in adjusted EBITDA year-over-year. Additionally, GAAP EPS nearly doubled, and adjusted EPS rose by 39%. The company anticipates a positive long-term outlook, driven by its recent acquisitions and expanding technical capabilities in the commercial data center market. For 2025, Willdan expects net revenue between $320 million and $330 million, adjusted EBITDA of $63 million to $67 million, and adjusted EPS ranging from $2.70 to $2.85 per share. This guidance exceeds current consensus estimates and highlights Willdan's strategic emphasis on diversifying its customer base, with commercial customers now comprising 15% of revenue, state and local governments 44%, and utilities 41%. The company also noted a record level of free cash flow at $4.49 per share in 2024, underlining its strong financial position and readiness for further growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.