Tecogen Off to Fantastic 2018

Tecogen Inc. (NASDAQ: TGEN – $3.88 & Fra: 2T1 – €3.02) 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 that has already shipped over 2,500 units, some of which have been operating for more than 25 years.

Tecogen is off to a fantastic start in 2018. The Company’s first quarter results have set the pace for the rest of the year. Revenue grew with an impressive 48.6% to $10,175,427 an absolute first quarter record. The positive results carried all the way to the bottom line with net income for the first quarter coming in at $21,000.

Tecogen’s new $10 million line of credit will be used to further increase the growth that the Company is experiencing. Part of this growth is driven by Tecogen’s ability to build and ship equipment, such as CHPs and chillers, quickly. So having enough finished machinery in inventory to turn over orders quickly is key!

Also, the funds offer the Company the possibility to take on larger orders. Especially public projects were difficult for Tecogen to participate in, as they required posting a surety bond. Thanks to the line of credit, the Company now has the ability to participate in the bidding process for these large projects.

Moreover, the revolving credit gives Tecogen enough financial flexibility to move full steam ahead with its development of the Ultera for the automotive and fork truck markets.

The Company’s sales backlog of equipment and installations stood at $14.6 million at the end of the first quarter and has further increased to $16.6 million this week. The solid backlog is mainly driven by strong traction in the InVerde and TECOCHILL product lines and installation services.

All in all, the outlook for Tecogen has never been more promising. The core business of selling, installing and servicing cogeneration and chiller systems is profitable, scalable and provides a fundamental revenue and profit stream.

In addition, its Ultera emissions technology, whether it’s upgrading existing stationary engine systems, retrofitting fork trucks to reach near zero emissions, or improving gasoline vehicle emissions, promises tremendous upside for the Company.

We reiterate our buy recommendation for Tecogen Inc. and are slightly increasing our target price from $9.06 to $9.19, which is 137% above today’s stock price.

Download the first quarter 2018 Tecogen Inc. Company Report.

Smallcaps.us Advice: BuyPrice Target: $9.41Latest Company Report (pdf)
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