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Capstone Turbine gets a Buy rating and $2 price target from Maxim Group

Analyst Tate Sullivan cites Capstone securing an order from a Wyoming energy company as well as winning two new patents as a key decision factor
capstone
Capstone's microturbines can produce anywhere from 30 kilowatts to 10 megawatts of power

Maxim Group on Thursday initiated coverage of Capstone Turbine Corporation (NASDAQ:CPST) with a buy rating and a price target of $2.

Analyst Tate Sullivan said in a note that Maxim’s decision was based Capstone securing an order from a Wyoming energy company as well as winning two new patents related to using hydrogen and liquid fuels to generate electricity.

Captsone, a manufacturer of microturbine energy systems, on Wednesday secured its fourth order from the unnamed energy company. On Monday, Capstone announced the patent awards.

READ: Capstone Turbine wins two US patents for multi-fuel applications

Sullivan also cited Capstone’s first-quarter revenue of $22 million, up 4% year-over-year, as a positive metric.

“We now forecast 2020 revenue of $89.6 million, up from the previously printed estimate of $89.1 million, based on CPST's potential growth in multiple end markets, including data centers, hospitals and large office buildings,” Sullivan wrote. 

Capstone, based Van Nuys, California, offers a product lineup of microturbines that can produce anywhere from 30 kilowatts to 10 megawatts of power, operating on a variety of gaseous or liquid fuels. To date, Capstone has shipped over 9,000 units to 73 countries and have saved customers an estimated $253 million in annual energy costs and 350,000 tons of carbon.

Maxim Group expects to receive or intends to seek compensation for investment banking services from Capstone in the next 3 months.

Capstone shares were at $0.82 on Thursday.

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