Benzinga | Nov 10, 2021 03:27PM EST

B. Riley Downgrades Orion Energy Post Q2 Results

* B. Riley analyst Alex Rygiel downgraded Orion Energy Systems, Inc. (NASDAQ:OESX) to Neutral from Buy and lowered the price target to $5 (an upside of 20%), from $8.50.

* Rygiel cites increased supply chain uncertainties for the downgrade.

* While growth opportunities exist with new products and services and passage of the infrastructure bill, the timing of positive impact to Orion's financials is less certain given the longer sales cycle and supply chain impacts to customers, mentions Rygiel.

* Recently, Orion Energy reported its Q2 results, with a revenue increase of 10.2% year-over-year to $36.5 million, missing the estimate of $38.6 million. EPS of $0.12 exceeded the consensus of $0.09.

* The gross margin expanded by 191 bps to 29.5%.

* Orion ended Q2'22 with nearly $40 million of liquidity, including $14.7 million cash and cash equivalents.

* FY22 Outlook: Orion expects to achieve revenue of at least $150 million versus the consensus of $152.16 million.

* Meanwhile, the company warned that achieving this goal is increasingly less certain because of broad-based supply chain challenges.

* Price Action: OESX shares are trading lower by 8.28% at $4.18 on the last check Wednesday.