Weakness in WLDN Shares Remain Overblown; Buying Opportunity into Earnings

研报英文原文证据摘录

Weakness in WLDN Shares Remain Overblown; Buying Opportunity into Earnings

on bottoms-up approach off its backlog, which was $1.0 billion at the end of FY25. We believe that

the company’s APG acquisition last year provides a new catalyst to growth that the Street is still

under-estimating the impact of its data center engineering projects with this business focused on

building substations and solar pieces requiring high voltage electrical engineering work requiring

sophisticated expertise and is tough to replicate. The Burton acquisition also provides plenty of

opportunities to cross-sell into existing utility companies, which we believe will be a significant value

add for the business moving forward given the critical nature of HVAC systems across commercial

footprints. The company has also done well with diversifying its client geography with California and

New York, which are WLDN’s two primary markets, now seeing revenue of ~62.5% in FY25, below

the ~70% seen in FY23 as the company sees greater opportunities outside these core markets,

including the Burton acquisition which opened the door to Southeast US opportunities. We believe

the increasing geographic diversification of its client base will provide new opportunities to tap into

a new cohort of customers across state/local governments reducing customer concentration risk,

which has been a prominent topic of conversation with investors.

Revenue by Client Geography

Sources: WLDN 10-K Filing, Wedbush Securities Inc.

We also note that the company’s direct and subcontractor costs remain a major impact on the

company’s net revenue generation with 40.4% of contract revenue being tied up in direct costs

as of 1Q26, but this is a solid improvement from the 44.0% in the year-ago period showing the