Willdan Group (WLDN) is seeing negative investor sentiment for reasons that are "overblown," but the company is expected to be a net beneficiary of the grid infrastructure buildout, Wedbush said in a Tuesday note.
Despite a reduction in funding from the Efficiency and Renewable Energy office of the Department of Energy, state and local governments will likely favor proven suppliers rather than try unproven alternatives, with existing contacts being sticky due to challenging rebid processes, Wedbush analysts said. They noted that Willdan has long-term relationships with major utility clients.
The company's utility-related revenue comes from regulator-approved program budgets rather than capital budgets, so the business is not being boosted by the artificial intelligence data center buildout, according to the note. Willdan's utility segment remains its largest profit generator, and it has been growing its contribution due to service improvements, the note said.
Despite short interest activity growing to around 11.7% of outstanding shares from 7.7% a month earlier, Wedbush projects the company's full-year 2026 net revenue to grow to $417.8 million from $397.6 million on its improving fundamentals.
Wedbush maintained the company's stock rating at outperform and price target at $130.
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