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Friday, February 21, 2020
Energy Services of America (ESOA)
Lower Revenue But Higher Margins
Energy Services of America Corporation is engaged in providing contracting services for energy-related companies. The company is primarily engaged in the construction, replacement, and repair of natural gas pipelines and storage facilities for utility companies and private natural gas companies. It services the gas, petroleum, power, chemical and automotive industries, and does incidental work such as water and sewer projects. Energy Service’s other services include liquid pipeline construction, pump station construction, production facility construction, water and sewer pipeline installations, various maintenance and repair services and other services related to pipeline construction.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Soft start to fiscal year. 1Q2020 EBITDA of $0.9 million was below our estimate due to a large project completion in 4Q2019 and limited larger projects behind it. Higher than expected gross margin of 9.1% partly offset the revenue fall off.
Adjusting FY2020 EBITDA to $7.1 million to reflect 1Q2020 operating results. Forecasted revenue of $110.1 million is lower, but EBITDA margin of 6.4% and gross margin of…
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