Stifel: Eguana Is “An Excellent Small Cap Stock” Based On Revenue Growth Opportunity
On December 20th, Eguana Technologies (TSXV: EGT) announced that they received a 500 unit order from PowerCenter+, valued at $6 million. The 500 unit order is most likely Eguana’s 5kW systems produced by the company which equates to roughly 2.5MW total.
In Stifel-GMP’s note, they reiterate their C$0.85 12-month price target and buy rating, saying that this initial 500 unit order could help provide a “transformational 2022.” Stifel adds that the initial order of 500 units is actually half what they expected Eguana to sell in all of 2022 and call Eguana, “an excellent small cap stock to own in 2022E given its revenue growth opportunities.”
For the order, as mentioned above, Stifel modeled out roughly 1000 units being shipped in the first year of this partnership with the contract stating that PowerCenter+ would purchase 10,000 units over a three-year period. Stifel believes that with this first large initial order, PowerCenter+ could exceed their expectations as long as supply chain issues do not arise.
Stifel believes that Eguana will look to fulfill/ship these units by the end of the first quarter of 2022, meaning that the company would generate in excess of $6 million revenue, above Stifel’s $4.8 million estimates.
Lastly, the day before the news release, Eguana announced that their largest investor has elected to convert all of its Series A shares into 18,119,167 common shares. Stifel says that this conversion helps clean up the companies share structure.
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