Why Is Pioneer Power (PPSI) Stock Up Today?

  • Pioneer Power (NASDAQ:PPSI) surged today along with the broader electric vehicle (EV) sector
  • At the time of writing, PPSI stock has surged more than 14% higher on earnings
  • Investors appear to be paying close attention to the company’s revenue growth prospects moving forward
EV stocks: an electric vehicle charging
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One of the biggest winners in today’s market is Pioneer Power (NASDAQ:PPSI), after the company reported Q1 earnings yesterday. Currently, PPSI stock is up more than 14%, easily outpacing the broader market.

What’s interesting is that looking at these earnings at face value, there’s not much to get excited about. Pioneer Power missed expectations on the bottom line, posting a loss of 8 cents per share relative to expectations of a 7-cent loss.

However, the company did beat on the top line, reporting 72% revenue growth. This provider of electric power systems saw revenue grow to $6 million last quarter, making the company’s valuation of around $35 million seem tenable to investors, from a top-line perspective.

Let’s dive more into what the company reported and why investors are getting bullish on PPSI stock.

PPSI Stock Surges Higher on Earnings

In some ways, it’s no surprise Pioneer Power is surging. High-growth stocks, particularly those in the EV sector, are almost all green today. Indeed, investor sentiment has shifted toward a risk-on view, at least for today’s session.

For Pioneer Power, it’s good to have macro catalysts. However, from a micro perspective, there’s investors like the progress the company has made this past quarter.

In addition to reporting some stellar revenue growth numbers, Pioneer Power also reported gross profit growth of 450%, to a gross margin of 14.5% this past quarter. Improved productivity, higher volumes, and new EV charging solutions were key drivers behind this growth.

During the past quarter, the company had some other major catalysts that contributed to these numbers. Notably, the company’s e-Bloc systems noted sales of $1.3 million in Q1, with a backlog of more than $15 million in orders. Forward-looking revenue is always a good thing. Additionally, initial order numbers for the company’s E-BOOST charging stations appear to have investors excited. These charging systems are used for heavy-duty vehicles such as buses and trucks.

Currently, Pioneer Power is one of a number of EV-related companies vying for market share in what could be a competitive space long-term. Thus, this stock is hard to value relative to its peers right now. That said, on the back of these earnings, investors appear to be willing to assign a higher valuation to this company with high growth potential.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


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