Eguana Technologies has 268 per cent upside, Mackie Research says

Look for Eguana Technologies’ (Eguana Technologies Stock Quote, Chart TSXV:EGT) stock to jump in the new year, says analyst Nikhil Thadani of Mackie Research, who sees the company’s order intake trending upwards over the latter half of 2018.

On Monday, Calgary-based Eguana announced it has been approved for South Australia’s Home Battery Scheme as well as state-owned Clean Energy Finance Corporation’s financing program to produce Eguana’s Evolve home battery systems. The two programs will provide an estimated 40,000 households with access to A$100 million in subsidies and low interest loans for residential battery storage.

Thadani says the Home Battery Scheme should add about $5 million to Eguana’s order intake for early 2019, which is double its existing order book.

“Order intake has seen a strong step up in recent months, as the company translates orders into revenue, likely in Q2 (March) F2019,” Thadani said in an update to clients on Monday. “In other words, in the March 2019 quarter, we expect the stock price to react positively, as the stock has been range bound in the ~19-22¢ range in recent months.”

“Medium term, a 10 per cent penetration in South Australia implies a ~$12 million revenue opportunity for EGT versus F2018 (Sept) revenue of ~$4 million and recent order intake of ~$6 million in H2 C2018,” the analyst says.

Thadani has made no change to his “Speculative Buy” rating and $0.70 price target, representing a projected 12-month return of 268 per cent at the time of publication.