Key Takeaways Willdan posted 66% Q3 EPS growth as contract revenue rose 15% and EBITDA climbed 53%. WLDN's record backlog and APG wins are expected to drive more than 50% unit growth in 2026.WLDN cut net debt to $16M, keeping leverage at 0.2x EBITDA to fund new acquisitions.Willdan Group (WLDN) is closing 2025 with strong momentum, and the key investor question is whether its expanding deal pipeline can translate into another year of solid EPS growth in 2026.Third-quarter 2025 results show clear operating l ...

Core Viewpoint - Willdan Group, Inc. has been awarded a $112 million energy savings performance contract by the City of San Diego, focusing on energy and water efficiency improvements across multiple city facilities [1] Group 1: Contract Details - The contract will support energy and water efficiency across 40 city facilities [1] - It includes the decarbonization of 23 facilities and upgrades to 39,000 city-owned streetlight fixtures [1] Group 2: Project Components - The projects will involve electrification measures and battery energy storage systems [1] - Electrification will also be applied to HVAC and water heating systems [1]

Core Insights - Willdan Group, Inc. (WLDN) is recognized as a strong performer in the Business Services sector, but its valuation is under increased scrutiny due to its forward P/E ratio of 23.75X, significantly higher than the industry average of 15.53X, raising questions about the sustainability of its growth fundamentals [1][3][23] Valuation and Market Performance - WLDN's shares have appreciated by 20.6% over the past six months, outperforming the broader industry and the S&P 500, which gained approximately 11% during the same period [3] - As of February 5, the stock was trading at $107.46, below its 52-week high of $137 and above its low of $30.43, indicating a significant rerating by investors [3] - The stock is currently trading below its 50-day moving average but above its 200-day moving average, suggesting a phase of consolidation after a strong performance [4] Financial Performance - In Q3 of fiscal 2025, WLDN reported a 15% growth in contract revenue and a 26% increase in net revenue, driven by approximately 20% organic growth and 6% from acquisitions [10] - Adjusted EBITDA rose by 53% and adjusted EPS increased by 66% year over year, reflecting operational efficiencies and cost control [10] - Management has raised 2025 targets, projecting net revenue of $360–$365 million, adjusted EBITDA of $77–$78 million, and adjusted EPS of $4.10–$4.20, indicating confidence in the visibility of current contracts [11] Growth Drivers - Approximately 85% of WLDN's revenue is derived from energy-related services, with a diversified client base including utilities, state and local governments, and commercial customers [12][14] - The company benefits from long-term utility programs and government projects that provide recurring revenue streams [14] - A significant long-term growth catalyst is the accelerating electric load growth driven by data centers and electrification, with upfront load-growth studies increasing organically by around 50% [15] - Strategic acquisitions have expanded WLDN's capabilities and geographic reach, while maintaining a conservative balance sheet with net debt of about $16 million [16] Competitive Landscape - WLDN competes with firms like ICF International, Tetra Tech, and Jacobs Solutions, each with varying strengths in energy efficiency and infrastructure consulting [20][22] - ICF International has a broader market mix, while Tetra Tech benefits from global scale but may lack flexibility in niche markets where WLDN excels [20][21] - Jacobs Solutions operates at a higher end of the market but may not be as agile in specialized energy efficiency programs compared to WLDN [22] Earnings Estimates - The Zacks Consensus Estimate for 2026 EPS remains stable at $4.53, indicating a year-over-year growth of 9.6%, while revenue is expected to grow by 4.8% [8] - The stability in earnings expectations supports the current valuation, but future upside will depend more on execution than on estimate revisions [8][19]

Core Insights - Willdan Group, Inc. (NASDAQ: WLDN) is recognized as one of the 12 best HVAC stocks to buy currently [1] - Wedbush has raised its price target for Willdan from $120 to $145, maintaining an Outperform rating, citing growth opportunities driven by government and utility efficiency initiatives [2] - The company completed the acquisition of Compass Municipal Advisors, which is expected to enhance its municipal advisory and public finance services [3] Company Overview - Willdan Group, Inc. provides professional, technical, and consulting services to utilities, government entities, and private-sector customers, organized into two main segments: Energy and Engineering and Consulting [4] Market Trends - The demand for infrastructure and energy improvements is increasing, which aligns with Willdan's strengths and growth potential [2][7]

Group 1: Market Overview - The analysis covers the performance of the US Small Cap 2000 index, indicating a focus on smaller companies within the US market [1] - The report highlights trends and potential investment opportunities in the small-cap sector, which may be influenced by broader economic conditions [1] Group 2: Company-Specific Insights - Green Plains Renewable Energy Inc is noted for its advancements in renewable energy production, positioning itself favorably in the growing green energy market [1] - HCI Group Inc is discussed in the context of its insurance operations, with emphasis on its financial performance and market positioning [1] - Willdan Group Inc is recognized for its consulting services in energy efficiency and infrastructure, reflecting its role in the evolving energy landscape [1]

Core Viewpoint - Willdan Group, Inc. will release its financial results for the fourth quarter of 2025 on February 26, 2026, after the market closes, followed by an investor conference call [1]. Group 1: Financial Results Announcement - The financial results for Q4 2025 will be announced after the close of the stock market on February 26, 2026 [1]. - An investor conference call will take place at 5:30 p.m. ET / 2:30 p.m. PT on the same day [1]. Group 2: Conference Call Details - The conference call will be available via an online, real-time audio webcast on Willdan's website [2]. - Listeners can also join the call by dialing 877-407-2988 or 201-389-0923 at least five minutes prior to the start time [2]. - A replay of the earnings webcast will be accessible a few hours after the call concludes [2]. Group 3: Company Overview - Willdan is a nationwide provider of professional, technical, and consulting services to utilities, government agencies, and private industry [3]. - The company's service offerings include electric grid solutions, energy efficiency and sustainability, energy policy planning and advisory, engineering and planning, and municipal financial consulting [3].

Group 1 - The article emphasizes the unique investment approach of "First Principles," which focuses on breaking down complex financial and technological problems to identify overlooked investment opportunities [1] - The analyst has a strong background in investment, private equity, and venture capital, demonstrating a proven track record of delivering strong returns [1] - The content on Seeking Alpha highlights emerging technologies, sustainable investing, and the intersection of innovation and finance, aiming to share insights and foster collaboration among investors [1]

Core Viewpoint - Willdan Group (WLDN) is rated as a Strong Buy due to its vertical integration and ability to capitalize on the regulatory lag in U.S. grid modernization [1] Company Analysis - Willdan Group is involved in authoring load growth studies through its subsidiary E3, which positions the company favorably in the market [1]

Core Viewpoint - Willdan Group (WLDN) is rated as a Strong Buy due to its vertical integration and ability to capitalize on the regulatory lag in U.S. grid modernization [1] Group 1 - Willdan Group is involved in authoring load growth studies through its subsidiary E3, which positions the company favorably in the market [1]

Core Insights - The U.S. infrastructure and public-sector spending environment is driving steady demand for engineering and technical consulting services, particularly benefiting companies like Willdan Group, Inc. and Jacobs Solutions Inc. due to policy-backed investment trends [2][3] Willdan Group, Inc. Insights - Willdan is focused on energy, utility, and municipal consulting, with a strong performance in energy transition and infrastructure modernization, supported by rising electricity load from data centers and grid upgrades [5][6] - The Energy segment, which is the majority of Willdan's revenues, saw contract revenues increase by 20% year over year to $508 million, and net revenues rose by 27% to $275 million during the first nine months of 2025 [6][10] - The company anticipates continued support from electricity load growth and infrastructure investment, positioning itself well for sustained growth as demand trends extend into 2026 [8] Jacobs Solutions Inc. Insights - Jacobs operates on a broader scale with diversified exposure across transportation, water, energy, and advanced facilities, benefiting from a record backlog of $23.1 billion, reflecting a 5.6% year-over-year increase [11][12] - The company has a trailing 12-month book-to-bill ratio of 1.1x, indicating strong booking activity, while gross profit in backlog increased by 13% year over year [12] - Jacobs faces challenges in parts of its environmental business due to softer U.S. demand and regulatory uncertainties, which may lead to variability in quarterly performance [13] Stock Performance & Valuation - Willdan's share price performance has outpaced Jacobs over the past six months, although Willdan is currently trading at a premium on a forward 12-month price-to-earnings (P/E) ratio basis [17][18] - Willdan's earnings estimates for 2026 remain unchanged at $4.53 per share, indicating expected earnings growth of 9.6% year over year, while Jacobs' estimates are at $7.01 per share, reflecting a 14.5% growth [20][22] Final Comparison - Both companies benefit from U.S. infrastructure spending, but Willdan is more focused on energy-related activities, while Jacobs has broader diversification but faces more variability in project timing and funding [22][23] - Willdan's steadier demand drivers and favorable near-term outlook make it a more compelling investment compared to Jacobs, which has a Zacks Rank of 4 (Sell) [23]