Willdan Group, Inc. (WLDN) Stock Analysis and Metrics

Sector: Industrials Industry: Engineering & Construction CIK: 0001370450

Market Cap 1.54 Bn

P/B 5.46

P/E 37.18

P/S 2.37

ROIC (Qtr) 12.36

Div Yield % 0.00

Rev 1y % (Qtr) 15.01

Total Debt (Qtr) 67.88 Mn

Debt/Equity (Qtr) 0.24

About

Willdan Group, Inc., a Delaware corporation, operates under the ticker symbol WLDN in the energy services market and the engineering and consulting market. Founded in 1964, the company has established itself as a trusted provider of professional, technical, and consulting services to utilities, private industry, and public agencies across various levels of government. Willdan offers a comprehensive range of services aimed at improving efficiency, resiliency, and sustainability in energy and infrastructure. These services include energy planning...

Willdan Group, Inc., a Delaware corporation, operates under the ticker symbol WLDN in the energy services market and the engineering and consulting market. Founded in 1964, the company has established itself as a trusted provider of professional, technical, and consulting services to utilities, private industry, and public agencies across various levels of government.

Willdan offers a comprehensive range of services aimed at improving efficiency, resiliency, and sustainability in energy and infrastructure. These services include energy planning and analysis, energy efficiency and sustainability, engineering, construction management, and economic and financial consulting services. The company's offerings cater to clients in the energy and infrastructure sectors, primarily consisting of public agencies, utilities, and private companies.

The company generates revenue through contracts, purchase orders, licensing agreements, or retainer letters. Willdan's services, including energy efficiency and sustainability, engineering, construction management, and economic and financial consulting services, form the primary source of revenue. Additionally, the company generates revenue through the sale of energy-efficient lighting and equipment.

Willdan's competitive advantage stems from its experienced professionals, comprehensive services, and proven track record of delivering successful projects. The company competes with other engineering and consulting firms, utilities, and private companies offering similar services. Willdan's customer base includes a diverse range of public agencies, utilities, and private companies, such as Consolidated Edison, the Dormitory Authority-State New York, the City University of New York, and the Pueblo School District 70.

Willdan's Energy segment provides specialized and innovative energy solutions, assisting businesses, utilities, state agencies, municipalities, and non-profit organizations in reducing energy demand and optimizing grid performance. The Engineering and Consulting segment, on the other hand, offers civil engineering-related construction management, building and safety, city engineering office management, city planning, civil design, geotechnical, material testing, and other engineering consulting services to clients.

Price action

Investment thesis

Bull case

Strong operating cash flow of 74.37M provides robust 1.10x coverage of total debt 67.88M, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 33.11M provide 3.84x coverage of short-term debt 8.63M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 294.80M provides 4.34x coverage of total debt 67.88M, indicating robust asset backing and low credit risk.
Operating cash flow of 74.37M provides exceptional 11.17x coverage of interest expenses 6.66M, showing strong debt service capability.
Tangible assets of 294.80M provide exceptional 12.65x coverage of deferred revenue 23.31M, showing strong service capability backing.

Bear case

Operating cash flow of 74.37M barely covers its investment activities of (50.02M), with a coverage ratio of -1.49, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Cash reserves of 33.11M provide limited coverage of acquisition spending of (40.80M), which is -0.81x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
Operating cash flow of 74.37M provides minimal -38.45x coverage of tax expenses of (1.93M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
Operating earnings of 46.26M show weak coverage of depreciation charges of 17.66M, with a 2.62 ratio indicating high capital intensity and potential reinvestment needs.
Free cash flow of 65.14M represents just -1.45x of debt issuance (44.78M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments 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.	67.29 Bn	138.47	5.18	6.02 Bn
2	FER	Ferrovial SE	52.08 Bn	189.56	5.95	-
3	EME	EMCOR Group, Inc.	48.16 Bn	357.05	7.52	0.42 Bn
4	FIX	Comfort Systems Usa Inc	45.71 Bn	4,991.17	39.02	0.39 Bn
5	MTZ	Mastec Inc	19.03 Bn	57.48	1.38	2.77 Bn
6	APG	APi Group Corp	17.83 Bn	114.31	2.33	3.05 Bn
7	J	Jacobs Solutions Inc.	17.05 Bn	39.38	1.38	2.96 Bn
8	BLD	TopBuild Corp	14.16 Bn	24.94	2.70	3.09 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	3.13	1.73
EV to Cash from Ops. EV/CFO	21.35	61.77
EV to Debt EV to Debt	23.39	13.28
EV to EBIT EV/EBIT	34.32	74.48
EV to EBITDA EV/EBITDA	25.50	39.60
EV to Free Cash Flow [EV/FCF] EV/FCF	24.37	143.23
EV to Market Cap EV to Market Cap	1.03	1.16
EV to Revenue EV/Rev	2.44	2.68
Price to Book Value [P/B] P/B	5.46	9.64
Price to Earnings [P/E] P/E	37.18	142.37

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Dividend Coverage Ratio	0.00	2.57
Dividend Payout Ratio % Div Payout % (Qtr)	0.00	35.52
Dividend per Basic Share Div per Share (Qtr)	0.00	0.24
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	0.00	5.38
Interest Coverage Int. cover (Qtr)	6.95	80.51

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	-10.05	-168.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	-37.65	655.79
Dividend Growth (1y) % Dividend Growth (1y) %	0.00	6.41
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	61.42	-38.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	32.21	14.77
EBIT Growth (1y) % EBIT 1y % (Qtr)	31.93	75.79
EBT Growth (1y) % EBT 1y % (Qtr)	48.15	29.61
EPS Growth (1y) % EPS 1y % (Qtr)	72.02	56.98
FCF Growth (1y) % FCF 1y % (Qtr)	43.71	-16.53
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	22.64	31.33

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	1.28	1.14
Cash Payout Ratio Cash Payout (Qtr)	0.00	0.05
Cash Ratio Cash Ratio (Qtr)	0.21	0.39
Current Ratio Curr Ratio (Qtr)	1.48	1.55
Debt to Equity Ratio Debt/Equity (Qtr)	0.24	0.90
Interest Cover Ratio Int Coverage (Qtr)	6.95	80.51
Times Interest Earned Times Interest Earned (Qtr)	6.95	80.51

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	9.80	0.96
EBIT Margin % EBIT Margin % (Qtr)	7.10	-3.15
EBT Margin % EBT Margin % (Qtr)	6.07	-5.46
Gross Margin % Gross Margin % (Qtr)	38.00	20.28
Net Profit Margin % Net Margin % (Qtr)	6.40	-6.83

Research Tools

Willdan Group, Inc. (NASDAQ: WLDN)

About

Price action

Investment thesis

Bull case

Bear case

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Industry comparisons