CPST - Capstone Turbine (CPST) - CPST reports strong unaudited 4Q and 2021 results

Gross bookings rising. Bookings in the 4Q were $12.7m, up 53% y-o-y and 21% q-o-q. Growth rates are significantly above our model's assumed growth rate of 20%. A six-pronged program to grow revenues (realignment of the salesforce, refocus on customer satisfaction, etc.) appears to be paying benefits. The book-to-bill ratio increased to 1.5:1 from 0.9:1 in the previous quarter. CPST announced 12 new orders during the quarter in nine different countries. Recent electric utility reliability issues combined with a new environmentally conscience administration lead us to believe higher-than-forecasted growth rates could continue.Cash position rising at a faster rate than expected. Total cash on hand rose to $49.5m up from $32.0m at the end of the third quarter. The rise reflects a $14.5m stock offering and the receipt of $5.0 million (less $0.3m in legal) from a law suit against a parts supplier. The numbers imply that operating cash flow was near break-even on a normalized basis absent any large change in working capital. Management has indicated it increased its cash position in light of COVID uncertainties. With the economy stabilizing, we believe CPST may use its cash position to pay down debt ($57.5m at the end of the third quarter) in 2021 unless it chooses to accelerate R&D.Rating remains Outperform with a $13 price objective. Results are coming in above the expectations we set when we initiated coverage on CPST in February. Favorable results give us increased confidence in our rating and price objective.Read More >>