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PowerSecure International, Inc. (POWR): This Power Company Has Impressive Backlog

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Shares of PowerSecure International, Inc. (NASDAQ:POWR) have taken investors on a fantastic ride this year. The Wake Forest, N.C.-based company has gone from lows near $4 per share in August to current highs near $16 per share. This remarkable run surely leaves investors wondering if now would be a good time to get out.

A record quarter

PowerSecure International, Inc. (NASDAQ:POWR) is coming off of a record first quarter. Here are some of the highlights:

– 35% year-over-year revenue growth
– 6% increase operating profit
– Record $206 million backlog

In 2012, the company generated $162 million in revenue. It has been aiming to nearly double sales to $300 million by 2015 — which it says is now achievable ahead of schedule.
These recent achievements continue to underscore an emerging small company with very solid fundamentals.


POWR Revenue TTM data by YCharts

A few years back, PowerSecure International, Inc. (NASDAQ:POWR) changed up its business strategy. Rather than dabbling in a variety of energy services, it began to focus on just providing customers with solutions for reducing energy use. In 2011, the company successfully sold the last of its non-core businesses in the natural-gas sector.
This strategy-shift affected earnings for a time, as the company was making investments in infrastructure. Now that the company is a couple of years into the new plan, earnings are picking up steam. Excluding the earnings spike related to the sale of the non-core business assets, net income is up 43% over the past year.
PowerSecure International, Inc. (POWR)The company is also in a strong financial position. PowerSecure International, Inc. (NASDAQ:POWR)’s long-term debt is only $3.7 million compared with $18.2 million in cash on hand. In other words, this company has achieved a major business shift without sacrificing a strong balance sheet. This only further highlights CEO Sidney Hinton’s leadership and the company’s bright future.

Backlog

PowerSecure International, Inc. (NASDAQ:POWR) is touting its impressive record $206 million backlog — a record it expects to break next quarter — as its brightest point. PowerSecure isn’t the only company flaunting recurring revenue. Both SolarCity Corp (NASDAQ:SCTY), and SunPower Corporation (NASDAQ:SPWR) are also companies with impressive backlogs. How do they compare?

Company Market Cap P/E Ratio Revenue Backlog
PowerSecure $290 million 66 $206 million
SolarCity $2.83 billion n/a $1.22 billion
SunPower $2.5 billion n/a $541 million

To be clear, these companies are very different. But they are similar in the sense that their mission is to save customers money on their power bills. SolarCity Corp (NASDAQ:SCTY) and SunPower Corporation (NASDAQ:SPWR) do this through solar leasing. PowerSecure does this through a range of solutions, such as energy-efficient lighting, generators for peak power hours, and renewable energy.

There is also a difference in the revenue backlog itself. SolarCity and SunPower’s recurring lease revenue is very long term — over the next 20 years. In contrast, PowerSecure International, Inc. (NASDAQ:POWR)’s backlog is mostly short term. All but $7 million is expected to come in the next couple of years, which is why the company has a forward P/E of just 18.

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