Tecogen Inc. (TGEN – $3.06) designs, manufactures and sells industrial and commercial CHP (Combined Heat & Power), or cogeneration, systems that produce combinations of electricity, hot water, and air conditioning. It’s a well-established Company, as it has already shipped over 2,500 units, some of which have been operating for more than 30 years.
Tecogen’s second quarter was an impressive one with double digit product and service revenue growth. Revenue in the second quarter, ended June 30, 2017 was $7,590,540 compared with $5,687,308 for the same period in 2016. An impressive surge of 33.5% and the highest quarterly revenue ever in the Company’s history.
Thanks to the successful acquisition of American DG Energy (ADGE), which added the onsite utility business to Tecogen, the Company is now completely vertically integrated, making it a clean technology company able of offering equipment design, manufacturing, installation, financing and long-term maintenance service.
The merger with American DG added $774,192 in revenue to the quarterly result. Note that this number only represents ADGE’s revenue that was earned over the six week period after the merger date on May 18th, 2017, NOT the entire quarter.
In addition, the Company is off to an outstanding start of its third quarter with an almost constant flow of new sales agreements being announced. For example, during the past few weeks, Tecogen has inked several chillers sales in the cannabis sector, and in the past week alone, the Company sold no less than six CHP units.
As a result, Tecogen’s sales backlog of equipment and installations stands at $16.1 million, well ahead of management’s goal to exceed $10 million in product and turnkey service revenue.
This is truly an exciting time for Tecogen and its shareholders. Its sales are growing substantially, the positive impact of the ADGE acquisition will improve quarter by quarter, and success with only one of the Ultera applications will take the Company into another category. If you don’t own shares of Tecogen yet, now is the time.
Based on the intrinsic value of Tecogen’s shares derived from our model, we reiterate our buy recommendation for the Company with a price target of $8.97, which is 193% above today’s stock price.
|Download the second quarter 2017 Tecogen Inc. Company Report.|
|Smallcaps.us Advice: Buy||Price Target: $8.41||Latest Company Report (pdf)|
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