- Pioneer power (NASDAQ:IPSP) surged today along with the broader electric vehicle (EV) sector
- At the time of writing, PPSI stock is up over 14% on earnings
- Investors seem to be paying close attention to the company’s revenue growth prospects going forward.
One of the biggest winners in today’s market is Pioneer power (NASDAQ:IPSP), after the company announced its first-quarter results yesterday. Currently, PPSI stock is up over 14%, easily outpacing the broader market.
What’s interesting is that looking at these earnings at face value, there’s not much to cheer about. Pioneer Power missed earnings expectations, posting a loss of 8 cents per share versus expectations for a loss of 7 cents.
However, the company beat the top line, recording revenue growth of 72%. Power systems provider saw revenue hit $6 million last quarter, making the company’s valuation of around $35 million acceptable to investors from a revenue perspective .
Let’s dive deeper into what the company reported and why investors are getting bullish on PPSI shares.
PPSI stock increases its profits
In some ways, it’s no surprise that Pioneer Power is booming. High-growth stocks, especially those in the electric vehicle sector, are almost all green today. Indeed, investor sentiment has shifted towards a view of risk, at least for today’s session.
For Pioneer Power, it’s good to have macrocatalysts. However, from a micro perspective, there are investors who like the progress the company has made over the past quarter.
In addition to posting exceptional revenue growth figures, Pioneer Power also recorded gross margin growth of 450%, for a gross margin of 14.5% in the last quarter. Improved productivity, increased volumes and new electric vehicle charging solutions were the main drivers of this growth.
During the last quarter, the company had other major catalysts that contributed to these numbers. Notably, the company’s e-Bloc systems recorded sales of $1.3 million in the first quarter, with an order backlog of more than $15 million. Prospective income is always a good thing. Additionally, the initial order numbers for the company’s E-BOOST charging stations seem to be getting investors excited. These charging systems are used for heavy vehicles such as buses and trucks.
Currently, Pioneer Power is one of many EV-related companies vying for market share in what could be a long-term competitive space. Thus, this stock is difficult to assess against its peers at this time. That said, buoyed by these earnings, investors seem willing to assign a higher valuation to this high-growth-potential company.
As of the date of publication, Chris MacDonald had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.