The Market Missed This Company’s New Data Center Theme

Currently trading at a non-GAAP P/E of around 9.7x, we see clear room for this company to experience an upwards re-rating in this valuation due to growing earnings that are becoming more predictable. Public peers in this infrastructure industry typically trade at far higher valuations, often in the P/E of 15–20x range. Our target company we want to share with you has now significantly expanded its manufacturing footprint, positioned itself closer to key customer clusters, and resolved both its cost base and legal overhangs. 

This double whammy of increased growth prospects and reduction in risk should lead to an expansion of the P/E to 20x earnings or more—which wouldn’t be crazy in this market given the company’s strong backlog, infrastructure tailwinds, and new data center angle.

This setup could turn this stock into a 2x or even 3x opportunity from current levels, especially if P/E expansion ends up being stronger than we’re assuming.

A Backlog Surge Signals a New Phase

This company operates in a business that insulates, protects, and connects underground infrastructure. And now, new macro tailwinds might finally introduce new exciting markets, as opposed to boring cyclical industries.

The company just locked in nearly $30 million in new deals across its market, including a new one..,. You guessed it…Data Centers projects! And, that’s on top of major expansion projects already underway.

After years of watching this company go nowhere fast, we started to see signs of change— most notably, a surge in profits and backlog. For example, Q3 backlog, year on year, has grown  56%, pointing to a stretch of strong demand visibility, which the company hasn’t had in years. 

More importantly, the business isn’t just winning one-off jobs—it’s embedding itself deeper into multi-year buildouts with some of the largest infrastructure developers in the world. Being accepted into key government-aligned programs in the Middle East, and solidifying JV partnerships there, could put the company on a runway of repeat work that adds predictability to what has historically been a lumpy revenue story.

The remainder of this post on Who the Company Is, as Well As the Link to the Information Arbitrage Alert Just released, is only visible to Signed In paid subscribers of GeoInvesting. You Can Get The Idea Now By Hopping into a Premium Subscription.

SIGN IN

200+ Multibaggers and counting

The post The Market Missed This Company’s New Data Center Theme appeared first on GeoInvesting.