Roth Capital Remains Positive On PowerSecure Following Acquisition Of PDI Data Center Business
In a research report sent to investors Wednesday, Roth Capital analyst Matt Koranda reiterated a Buy rating on PowerSecure International (NYSE:POWR) with a $14 price target, as the company announced it acquired the data center energy services business of Power Design, Inc. (PDI) for $13mn in cash.
Koranda noted, “In our view, with its acquisition of Power Design, Inc., POWR is buying (1) an experienced data center sales force; (2) a mature pipeline of opportunities that could convert into material sales wins in the near-term; and (3) key customer relationships that would have taken a substantial investment of time and capital to develop organically. While POWR likely could have built these capabilities in-house, we believe the PDI acquisition accelerates the company’s position within the data center market for an attractive price (0.5x TTM revenue, or 0.6x including earn-outs, and 1.7x TTM EBIT, or 1.9x including earn-outs). This fits POWR’s historical acquisition strategy of acquiring complementary businesses at attractive multiples, in our view. We would look for a DG project win in the data center market as future validation for this acquisition.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Koranda has a total average return of -19.6% and a 0.0% success rate. Koranda has a -13.1% average return when recommending POWR, and is ranked #3116 out of 3332 analysts.