Skip to main content

NEW YORK (TheStreet) -- Shares of Orion Energy Systems (OESX) are tanking, down 7.11% to $3.72 on heavy volume in late morning trading Friday, after the company announced that it is pricing its upsized underwritten public offering at $3.50 per share.

The net proceeds of about $15.2 million, from the company's 4.75 million share offering, will be used for general corporate purposes, including pursuing acquisitions, expanding the LED lighting business and supporting working capital needs.

Craig-Hallum Capital Group is acting as sole managing underwriter.

Exclusive Report:Jim Cramer's Best Stocks for 2015

About 2.19 million shares of the lighting fixtures company has exchanged hands as of 11:49 a.m. ET today, compared to its average trading volume of about 80,568 shares a day.

Manitowoc, WI-based Orion Energy Systems is a provider of energy efficient lighting retrofit products and services.

The company researches, develops, designs, manufactures, markets, sells and implements energy management systems consisting of commercial and industrial interior and exterior lighting systems, controls, power data management and cloud-based data storage and related services. 

Separately, TheStreet Ratings team rates ORION ENERGY SYSTEMS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ORION ENERGY SYSTEMS INC (OESX) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electrical Equipment industry. The net income has significantly decreased by 558.0% when compared to the same quarter one year ago, falling from $1.02 million to -$4.66 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, ORION ENERGY SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ORION ENERGY SYSTEMS INC is rather low; currently it is at 18.68%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -17.84% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$5.13 million or 494.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.15%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 520.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • You can view the full analysis from the report here: OESX Ratings Report