Eguana Technologies could see revenue ramp, Mackie Research says

Eguana Technologies’ (Eguana Technologies Stock Quote, Chart TSXV:EGT) share price has been range-bound since mid-2018 but Mackie Research analyst Nikhil Thadani says that the stock could rapidly rerate as confidence builds for its quarterly revenue approaching and consistently exceeding the $2-$3 million mark.

Energy storage systems company Eguana announced its first quarter fiscal 2019 financials on March 1, reporting revenue of $850,000, with the company continuing to build its channel partners by adding more than 30 North American and Australian partnerships with distributors and solar dealers.

On Monday, the company announced a European exclusive agreement for its Enduro home storage system with Hanwha Q Cells, with Thadani saying that the deal will put EGT’s Enduro product immediately in front of more than 1,000 installers, including more than 600 installers in Germany alone.

“The company has laid some key foundations for scaling revenue in C2018,” says Thadani in a client update on Monday. “EGT improved order intake since last summer and has also been building out its installer and distribution partner network in the US, Europe and Australia, which bodes well for C2019 repeat orders. The next logical step in building the company’s platform should, therefore, relate to adding third party contract manufacturing in order to scale up capacity on the back of distribution partners’ initial orders, training and successful initial installations.”

Thadani says he’s optimistic that the Q Cells contract could provide about $3 million in revenue potential in the first year alone and more than $20 million over three years.

The analyst is maintaining his “Speculative Buy” rating and $0.70 target, representing a projected return of 233 per cent at the time of publication.