NEW YORK (TheStreet) -- Shares of Energy Focus (EFOI) - Get Report were falling 25.8% to $17.06 on heavy trading volume after the home furnishings and fixtures company priced its follow-on offering of 3 million shares it will sell along with certain shareholders.
Energy Focus prices the 3 million shares of common stock in the public offering at $17 a share. The company and selling shareholders are each offering 1.5 million shares in the offering.
Both the company and the selling shareholders granted the underwriters a 30-day option to buy up to 450,000 shares of common stock.
Energy Focus will not receive any proceeds from the shares sold by the selling shareholders. The company said it plans to use its proceeds from the offering to finance its growth efforts, for working capital, and other general corporate purposes.
The offering is expected to close on September 16.
About 2.4 million shares of Energy Focus were traded by 10:04 a.m. Friday, above the company's average trading volume of about 425,000 shares a day.
TheStreet Ratings team rates ENERGY FOCUS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENERGY FOCUS INC (EFOI) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EFOI's very impressive revenue growth greatly exceeded the industry average of 14.1%. Since the same quarter one year prior, revenues leaped by 148.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EFOI's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EFOI has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
- ENERGY FOCUS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ENERGY FOCUS INC continued to lose money by earning -$1.03 versus -$1.50 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus -$1.03).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 439.4% when compared to the same quarter one year prior, rising from -$0.62 million to $2.11 million.
- 46.24% is the gross profit margin for ENERGY FOCUS INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 12.70% is above that of the industry average.
- You can view the full analysis from the report here: EFOI Ratings Report