iSun, Inc (NASDAQ: ISUN) has experienced a significant surge of over 88% since November 22nd, 2023, with 12% of that increase observed within the current trading day. Similar to other Nasdaq-listed companies facing minimum bid requirement challenges, iSun has witnessed this remarkable upswing without any corresponding press releases or SEC filings to justify the sudden uptick. Looking further, we aim to uncover the underlying factors propelling this sudden rise by examining the company’s recent material events and financial performance, providing a comprehensive evaluation of what the future might hold for ISUN.

Background:
ISUN’s been in business since 1972, so quite a long while. After 47 years of being private, they decided to go public in June, 2019 and were previously known as The Peck Company.
Following the acquisition of ISUN, the company underwent a name change, becoming the entity known today. They have since taken the lead in integrating influential electrification technologies.
With a longstanding reputation as a reliable service partner for Fortune 500 firms, ISUN has a track record of installing various technologies, including clean rooms, fiber optic cables, flight simulators, and over 600 megawatts of solar systems.
The company offers an extensive array of solar services covering residential, commercial, industrial & municipal, as well as utility-scale projects.
Highlighting the importance of shifting towards clean, renewable solar energy, it’s worth noting that ISUN is committed to seizing profitable growth opportunities by offering solar electric vehicle charging solutions for both grid-tied and battery-backed systems.
Latest Earnings:
Unlike the last few write ups, we’re fortunate to have access to more informative press releases and SEC filings for ISUN. That said, let’s talk about their latest earnings and how the business is currently performing.
Highlights by numbers:
- Q3 2023 revenue of $27.9 million, up 47% from Q322, as continued strong commercial and industrial execution drives growth
- YTD revenue of $70.3 million, up 39% over first nine months of 2022
- Gross profit of $5.4 million, up 50% from Q322
- Gross margin of 19.45%, up 45 basis points from 19.0% in 2022’s third quarter, as benefits from synergies were offset by mix
- Awarded $27.0 million in new solar and EV infrastructure contracts in Q3 2023, with a total of $67.0 million in first nine months of 2023
- Continuing successful execution of growth strategy, leveraging tailwinds
Okay great, both the revenue and profit margins are moving in a positive direction. In this market, let’s be honest, what truly matters is whether this long-standing company can generate profits while tackling the substantial growth potential in renewable solar energy projects.
There’s a few things worth noting from this release, the bigger point being the heavy tailwinds pushing them into record growth this year. Their commercial and industrial division showed impressive growth, achieving a 47% revenue boost and a 45 basis point increase in margins compared to the previous year. Despite challenges due to higher interest rates for residential customers, the team remains focused on seizing opportunities driven by climate policies and growing interest among customers in alternative energy solutions.
On another front, their operating loss in Q323 was ($1.8) million, a $3 million or 64% improvement compared to a loss of ($4.9) million in Q322. The cause for this? Higher revenue and lower operating expenses.
To be frank, the majority of CEOs across various industries anticipate higher productivity with fewer resources, which can be a continual source of high stress for employees actually accomplishing the daunting dask. Nethertheless, ISUN is achieving record growth with ease…
As a final thought on operating income, their YTD loss was ($6.2) million, a $10 million or 62% reduction compared to a loss of ($16.2) million during the same period in 2022.
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Thoughts from the CEO:
“We continue to make substantial progress towards the targets we set for iSun’s performance this year, as we execute on our strategy and fulfill our commitments to investors. We remain confident that our expanded capabilities effectively address the needs of more customers and position us to accelerate our growth in the evolving alternative energy sector. Our continued success in winning significant contracts with existing and new customers reflects the appeal of our platform approach that delivers a suite of services to meet the needs of diverse customers. This year, we are also benefiting from the expertise of our team in executing efficiently on our backlog to address our customers’ needs and leveraging the relationships and partnerships we have established. Now that our country’s energy policy has been established for the next 10 years through the IRA legislation passed in 2022, we expect those factors to help us scale our operations significantly in the next few years, no matter what macroeconomic challenges may persist, and thus enable us to generate steadily higher revenue and reach operating profitability in the years ahead.”
Thoughts from Retail:
Several types of traders on Twitter are actively discussing ISUN, many with tens of thousands of followers. One in particular with a 72.1K following on Twitter, @MoonMarket_, mentions he’s accumulating for potentially larger moves ahead, based on technical trends.
@greatstockpicks and @FrankieBstock, with a combined following of 58.4K, are also actively discussing ISUN. Their sentiments lean positively, indicating that the deeper they dive into the company, the more appealing it appears.
Frankie also highlights, “Wainwright has a .50 target…given the revenue, growth, low offering risk and 161m backlog I could see it going higher but let’s focus on .50 with a stop loss around .12”.
It’s certainly encouraging to witness higher attention from influential sources discussing a stock, but it’s always crucial to conduct your own research and form an independent judgment.
Ultimately, all we can do is hope for the best regarding anyone’s analysis, even reputable analysts. While they are probably more reliable than figures like Cramer, who is often criticized for his inaccuracies concerning small-cap stocks, it’s essential not to take opinions as absolute truths.
Analyst Coverage:
As mentioned, analysts might not always be the most accurate to follow, but it’s usually reassuring when individuals with robust financial backgrounds, widespread industry connections, and expertise provide their insights on a public company.
ISUN is presently under analysis by three different firms: Alliance Global, Roth Capital Partner, and H.C. Wainwright & Co. They have set varying buy recommendations and price targets for the company, with a low, median, and high range of $0.50, $2.00, and $2.75, respectively. That’s a monumental 127.4%, 809.9%, and 1151.1% increase should ISUN meet those expectations.
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What’s Next:
ISUN seems to primarily focus its market updates on financial aspects. Upon reviewing all their 2023 releases, they consistently highlight robust execution and growth, reinforcing the anticipation of total revenue reaching $95-100 million this year, indicating a 24-31% surge compared to 2022.
As mentioned earlier, ISUN currently operates at a loss, and often experiences fluctuating quarters due to the impact of high-value contracts. These contracts can significantly influence the company’s financial results.
Thankfully, ISUN holds a total backlog of $161.8 million as of September 30, 2023, ensuring a stable revenue stream as projects are finalized. The bulk of this backlog, approximately $140.3 million, pertains to commercial and industrial applications, projected to be finished within a span of 10-18 months.
As is common with non-profitable businesses, it’s crucial to stay watchful for potential near-term dilution. Fortunately, ISUN recently secured term sheets for a non-dilutive $8 term loan, providing a reassuring stance for the time being. Should the management maintain this level of execution, achieving profitability may not be far off and would be a substantial milestone.
Regarding Nasdaq’s minimum bid requirement of $1.00, ISUN received an extension until May 2024, aiming to facilitate an organic increase in their stock price without the risk of a reverse split.
Conclusion:
With a long-standing history and a shift towards electrification technologies, ISUN’s dedication to renewable solar energy and diverse services positions it for substantial growth.
The overarching market trend aligns favourably, offering support to their endeavours, while the management team’s restructuring on cost efficiencies bode well for near term profitability. Their recent earnings demonstrated substantial revenue growth, particularly in their commercial and industrial segments where they’ve overcome significant market challenges.
In the realm of undervalued micro-cap stocks listed on the NASDAQ, ISUN emerges as a compelling candidate worth monitoring closely.
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Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.
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