In a research report to clients today, Thadani initiated coverage of Eguana with a “Speculative Buy” rating and a one-year price target of $0.70, implying a return of 137 per cent at the time of publication.
Calgary-based Eguana designs and manufactures products designed for power control and conversion in energy storage systems. The company has invested more than $30-million over the past decade-and-a-half and boasts more than 5000 installs in Europe.
The analyst says a recent change in focus has opened up larger market potential for Eguana and thinks the company now has two revenue opportunities, one in Hawaii and the other in Europe, that together could deliver more than $60-million a year in annual revenue.
“In 2015, EGT decided to focus on larger opportunities for residential, commercial and automotive applications in the USA, Europe and Asia, ending an exclusive relationship with Sonnenbatterie ($1.5 mln/qtr peak revenue run-rate),” says Thaadani. “Eguana has secured ~17 design wins over the past 12 months, which according to the company could generate ~$57-75 mln revenue over the next 18 months. Design wins span applications including utility grid services, electric vehicle charging, solar/storage and commercial peak power shaving. The company’s immediate growth drivers appear to be the Hawaiian market, where the company expects significant order growth and European volume recovery, which could be on track in upcoming quarters.”
Thadani says Tesla’s marketing has sparked investor interest in the battery space, and notes that Elon Musk has said the energy storage systems could be a faster growing segment than electric vehicles. The analyst believes Eguana is clearly poised to benefit from what stands to be robust international growth.
“Nothing is as powerful as an idea whose time has come,” says Thadani.
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There is a typo, it is 5000 installs in Europe, not 500. Also, there is good progress being made in Australia that was not mentioned. However, this is a good start just like the 70 cents target is a good start. This one has 10 bagger all over it!
Good spot, we fixed the figure...
Would be easier to read if it said 5,000 installs.
That's why they put commas in numbers. Readability.