Capstone Turbine (CPST) Moves Past Transitional Year; Pipeline Remains Robust - Roth Capital
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Roth Capital affirms Capstone Turbine (Nasdaq: CPST) with a Neutral rating and $1.45 price target following Q1 results issued Thursday night.
Analyst Craig Irwin noted mixed results kickoff a post-transitional year for Capstone Turbine. Irwin said,
it appears the cost out execution is tracking in-line with plan, and sales prospects are now more diversified by both geography and customer industry verticals. We now look for evidence of revenue acceleration before potentially becoming constructive on the stock.
Capstone's pipeline remains robust, with $855.9m spread-out pretty evenly geographically. Latin America represents the largest portion at $298.3m, or 35% of the total pipeline.
We see FY17 taking shape with a more measured margin ramp due to launch of the Signature Series. Capstone has potential to accelerate growth in the F2H17 with Russian distributor BPC back online, near-term opportunities in Mexico, Colombia, the U.S., the Signature Series in full production, and the financing JV. However, we expect margins to take a bit longer to hit the company's 25% target, the analyst said.
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