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Monday, April 15, 2024

(TSX:E) Enterprise Group Continues to Add to it’s Revenues

Enterprise Group, Inc. , a company known for its outstanding reputation in providing high quality and specialized equipment for pipeline construction, oilfield maintenance as well as transportation industries, has announced the results for the second quarter of the current year.


The results are quite impressive, as the company has never seen such outcomes ever before. But what caused such an impressive performance?

Well, for starters Enterprise made a recent acquisition of Evolution Power Projects, Inc. (EPP), which is a powerful supplier of highly technical (low emission, mobile-powered system) systems and infrastructure to the Energy, Resource and Industrial Sectors. They saw much potential for growth in this business area and strongly believe that EPP is much ahead of its competitors.

This decision has proved to be quite a sensible one as it immediately provided Enterprise with a strong competitive advantage and has added to its revenues in the recent quarter as shown in the Q2 2022 results.

For a company whose ideology is based on the environmental vision of mitigating, reducing and eliminating CO2 and other greenhouse gasses by the products and services it provides – it was a good call to launch a fully owned subsidiary such as EPP which excels in electricity methods of Mobile Power Systems.

This means the blue chip clientele of the parent company would be delighted. Since, it is going to look forward to even more innovative, low carbon, and environmentally responsible options for these customers, the customer activity levels have helped in greatly increasing the current quarter’s results.

Here’s a short video on Evolution Power Projects:


The first six months of the year 2022 have been very prosperous with an increase of 42% in revenue, and a whopping 151% and 278% in EBITDA and the gross margin respectively (based on adjusted values; the Company has presented an Adjusted Gross Margin and Adjusted EBITDA to reflect the results of operations without any subsidy programs). Moreover, the cash flow increased by more than 40% from the cash flows for the same period in the prior year.


All this is well and good. But should you invest in the share of Enterprise?

Well, there are two sides to the coin.

In the coming few years Enterprise’s cash flows are going to be significantly higher, while their profits are expected to increase by a 100%. Rises in these two metrics definitely suggest a positive signal for Enterprise’s share price. This of course is based on optimistic future growth expectations.

However, on the flip side, it is wise to keep in mind that the price of Enterprise’s stock has already surpassed most of its industry peers. This suggests signs of the stock being over-inflated; meaning in spite of our optimistic expectations above, since the stock price may have already absorbed the impact of those positives it will not experience a level of growth in its share price that is warranted by the rises in revenue and cash flow. This is our take on the matter to give you a fair picture of the scenario. The choice is yours!

To learn more about Enterprise Group please visit their website


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