Wedbush Morning Call - Jul 14 2026 7:03AM

Research evidence excerpt

Wedbush Morning Call - Jul 14 2026 7:03AM

for various reasons that we believe are overblown with estimates still going up. The bear thesis remains straightforward with

short interest activity now at ~11.7% of shares outstanding, representing 1.7 million shares, well above the 6/15 level of ~7.7%

of shares outstanding short representing 1.1 million shares a faster pace of short accumulation than the prior period even with

the thesis still intact. Despite this weakness, our estimates reflect improving fundamentals rather than deteriorating financials

with our FY26 net revenue estimate increasing from $397.6 million to $417.8 million and our growth estimate from 9.0% to

14.5% pointing to solid growth opportunities into the rest of FY26.

Short Interest as % of Total Shares Outstanding

Sources: MarketBeat, Wedbush Securities Inc.

One reason this sentiment is shifting is due to the $1.95 billion DOE Energy Efficiency and Renewable Energy office decreasing

flow to state and local governments by 10% y/y in FY26, net of the $1.15 billion of repurposed IIJA balances Congress redirected

to EERE which also fell 44% y/y, reflecting a modest headwind to the federal backstop behind state and local energy efficiency

budgets. Despite this recent change, we believe state and local governments are unlikely to shift spending away from products

with a demonstrated track record toward unproven alternatives and contracts remain sticky given the compliance burden and

legacy-system lock-in of switching and even disrupted contract cycles face a multi-year rebid process, further incentivizing

these agencies to stick to what they know delivers tangible results. We note that Willdan has worked continuously with Con