Friday, December 13, 2019

Energy Services of America (ESOA)

Solid Finish to Fiscal Year 2019 and Special Dividend Announced.

Energy Services of America Corporation is engaged in providing contracting services for energy-related companies. The company is primarily engaged in the construction, replacement, and repair of natural gas pipelines and storage facilities for utility companies and private natural gas companies. It services the gas, petroleum, power, chemical and automotive industries, and does incidental work such as water and sewer projects. Energy Service's other services include liquid pipeline construction, pump station construction, production facility construction, water and sewer pipeline installations, various maintenance and repair services and other services related to pipeline construction.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for the price target, fundamental analysis, and rating.

Solid End to fiscal year with results above expectations. FY2019 EBITDA of $8.0 million was above our estimate of $6.6 million estimate due to lower costs that more than offset lower revenue. The completion of the Goff project had a slightLY negative impact, but margins were higher than expected; gross margin was 7.3% (+87 basis points) and EBITDA margin was 4.6% (+85 basis points). The current backlog of $63 million was up $8 million higher than 3Q2019.

Increasing FY2020 EBITDA to reflect positive finish to FY2019. Assuming no weather and/or operating miscues, we forecast that FY2020 EBITDA will move up to $8.6 million based on EBITDA margin of 5.6%, which is...

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report.  NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.