Orion Group Holdings Inc (NYSE: ORN)

Sector: Industrials Industry: Engineering & Construction CIK: 0001402829
Market Cap 370.16 Mn
P/B 2.34
P/E 39.04
P/S 0.44
ROIC (Qtr) 7.70
Div Yield % 0.00
Rev 1y % (Qtr) -0.70
Total Debt (Qtr) 65.49 Mn
Debt/Equity (Qtr) 0.41

About

Orion Group Holdings, Inc. (ORN) is a leading specialty construction company that operates in the infrastructure, industrial, and building sectors. The company provides services through two segments: Marine Construction Services and Concrete Construction Services. Orion Group Holdings' services are utilized in various end markets, including port expansion and maintenance, bridges, causeways, recreational waterside industry, Department of Defense, energy industry, coastal protection and reclamation, and hurricane restoration and repair. Orion Group...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 27.62M provides robust 0.42x coverage of total debt 65.49M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 422.38M provides 6.45x coverage of total debt 65.49M, indicating robust asset backing and low credit risk.
  • Tangible assets of 422.38M provide exceptional 9.63x coverage of deferred revenue 43.86M, showing strong service capability backing.
  • Robust tangible asset base of 422.38M provides 5.87x coverage of working capital 71.90M, indicating strong operational backing.
  • Tangible assets of 422.38M provide robust 5.82x coverage of other current liabilities 72.54M, indicating strong asset backing.

Bear case

  • Operating cash flow of 27.62M barely covers its investment activities of (26.54M), with a coverage ratio of -1.04, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 27.62M provides insufficient coverage of deferred revenue obligations of 43.86M, which is 0.63x, raising concerns about future service delivery capabilities.
  • High receivables of 213.26M relative to inventory of 8.98M (23.76 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 1.08M provides weak coverage of capital expenditures of 26.54M, with a 0.04 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 20.15M show weak coverage of depreciation charges of 30.93M, with a 0.65 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2024)

Concentration Risk Type Breakdown of Revenue (2024)

Peer comparison

Companies in the Engineering & Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PWR Quanta Services, Inc. 62.71 Bn 61.60 2.31 6.02 Bn
2 FER Ferrovial SE 48.08 Bn 14.25 5.05 -
3 FIX Comfort Systems Usa Inc 35.76 Bn 42.69 4.30 0.39 Bn
4 EME EMCOR Group, Inc. 29.29 Bn 25.91 1.80 0.42 Bn
5 APG APi Group Corp 17.37 Bn 111.36 2.27 3.05 Bn
6 MTZ Mastec Inc 17.01 Bn 51.39 1.24 2.77 Bn
7 J Jacobs Solutions Inc. 16.94 Bn 58.56 1.41 2.71 Bn
8 BLD TopBuild Corp 13.35 Bn 23.52 2.55 3.09 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.06 1.61
EV to Cash from Ops. EV/CFO 16.19 6.94
EV to Debt EV to Debt 6.83 11.81
EV to EBIT EV/EBIT 22.19 17.80
EV to EBITDA EV/EBITDA 8.92 13.77
EV to Free Cash Flow [EV/FCF] EV/FCF 412.07 55.77
EV to Market Cap EV to Market Cap 1.21 1.20
EV to Revenue EV/Rev 0.53 1.65
Price to Book Value [P/B] P/B 2.34 5.81
Price to Earnings [P/E] P/E 39.04 35.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.51
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 25.81
Dividend per Basic Share Div per Share (Qtr) 0.00 0.24
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.05
Interest Coverage Int. cover (Qtr) 1.93 80.15
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -122.21 -166.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -82.60 637.72
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.87
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 998.11 92.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 40.65 8.04
EBIT Growth (1y) % EBIT 1y % (Qtr) 1,044.72 85.34
EBT Growth (1y) % EBT 1y % (Qtr) 177.45 42.07
EPS Growth (1y) % EPS 1y % (Qtr) 165.00 43.76
FCF Growth (1y) % FCF 1y % (Qtr) -96.72 -20.95
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 29.80 32.46
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.98 1.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.05
Cash Ratio Cash Ratio (Qtr) 0.02 0.38
Current Ratio Curr Ratio (Qtr) 1.36 1.55
Debt to Equity Ratio Debt/Equity (Qtr) 0.41 0.89
Interest Cover Ratio Int Coverage (Qtr) 1.93 80.15
Times Interest Earned Times Interest Earned (Qtr) 1.93 80.15
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 6.10 0.40
EBIT Margin % EBIT Margin % (Qtr) 2.41 -2.31
EBT Margin % EBT Margin % (Qtr) 1.16 -4.59
Gross Margin % Gross Margin % (Qtr) 13.00 20.38
Net Profit Margin % Net Margin % (Qtr) 1.10 -5.96