Tecogen’s Record Sales and Earnings Trigger Target Price Increase
Tecogen (TGEN – $2.99 & Fra: 2T1 – €2.17), which designs, manufactures and sells industrial and commercial CHP systems, had a transformative 2017 as it generated a positive net income for the full year, successfully completed the acquisition of American DG Energy (ADGE), and repaid most of its debt.
Both for the fourth quarter, as well as for the full year, Tecogen reached record breaking revenue of $10.2 million and $33.2 million respectively. Also net income improved significantly in 2017 to $47,436 from a loss of $1,096,283 in the prior year, an increase in profitability of $1,143,719.
Perhaps even more importantly, Tecogen achieved adjusted EBITDA of $533,000 in the fourth quarter, which was not only a record, it also marked the sixth consecutive quarter and the first full calendar year of positive operational results.
Sales backlog of equipment and installations has grown to $15.7 million at year end 2017 compared to $11.1 million at year end 2016, a sizable increase. As of March 19, 2018, backlog stood at $17.4 million, well ahead of the Company’s stated goal of maintaining sales backlog above $10 million.
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. Moreover, its Ultera emissions technology, whether it’s upgrading existing stationary engine systems, retrofitting fork trucks to be Near Zero emission, or improving gasoline vehicle emissions, promises tremendous upside for the Company.
Based on our model, we reiterate our buy recommendation for Tecogen Inc. and are increasing our target price from $8.41 to $9.06, which is 203% above today’s stock price.
Download the fourth quarter 2017 Tecogen Inc. Company Report.
|Smallcaps.us Advice: Buy||Price Target: $9.41||Latest Company Report (pdf)|
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