NV5 Global: Strong Revenue Visibility Means Strong Price Target
NV5 Global: Strong Revenue Visibility Means Strong Price Target
NV5 Global, Inc. is a provider of professional and technical engineering and consulting solutions in the infrastructure, energy, construction, real estate and environmental markets. The Company’s clients include the U.S. federal, state and local governments, and the private sector.
August 27, 2021
Price (as of close on Aug 26, 2021)
$102.34
Rating
BUY
New Price Target
NV5 Global, Inc. (NVEE)
NVEE reported Q2:21 revenue growth of 10.3% and EPS gains of 44%. Backlog remains strong at $603 million, ensuring revenue visibility. We increase our target price 
and maintain our BUY rating.
Q2:21 Highlights
➢Q2:21 revenues increased 10.3% YOY to $179.5 million, primarily due to growth in the Infrastructure (+12.2% YOY) and Business Technology Services (+19.6% YOY) segments. The Company exited the quarter with backlog of $603 million.
➢Adjusted EBITDA increased 27% YOY to $34.2 million, while adjusted EBITDA margin increased 250 basis points to 19.1%. Adjusted EPS rose 44% to $1.34.
➢NVEE generated $6.2 million from cross-selling in Q2:21 while also securing key contract wins across all segments.
➢The Company produced $14.1 million of cash flow from operations and ended Q2:21 with cash of approximately $113 million on the balance sheet, providing plenty of funding for future acquisitions.
➢ Contracts delayed by the change in administrations are moving ahead and NVEE could be a prime beneficiary of the $1 trillion infrastructure bill making its way through the US Congress.
➢NVEE increased its 2021 revenue guidance by roughly 8% to $705-$727 million and adjusted EPS guidance by 18% to $4.20 - $4.55.
➢Taking into account strong H1:21 results and the favorable H2 outlook, we increase our price target to and reiterate our BUY rating. Our target price implies for NVEE shares.
PRIMARY RISKS
➢ An economic downturn could restrict the Company’s access to capital markets and slow acquisition-related growth.
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