Gibson Technical Services (GTS), an Orbital Energy Group (NASDAQ: OEG) company has inked a deal to buy Atlanta-based IMMCO Inc., a privately-owned full-service telecom engineering and network design company. Following the news, shares of the company rose over 4% by the close on Monday.
Orbital Energy Group is the creator of a diversified energy services platform, while IMMCO caters to a huge client base globally, with diversified engineering services and customized software solutions.
Orbital is working toward the target of transforming into a full-service electrical, telecommunications, and renewable infrastructure services platform. Thus, the recent deal complements the company’s plan, as it will combine GTS’s Master Services Agreements, capabilities, and contacts throughout the telecommunications industry with IMMCO’s diversified services.
Additionally, IMMCO’s specialization in the 5G spectrum is likely to provide synergies to the company’s telecom platform. The financial terms of the deal were kept under wraps.
Following the announcement of the deal, Orbital Energy Group CEO Jim O’Neil commented, “Increasing bandwidth requirements in areas such as healthcare, entertainment, and other public venues, will require a new level of technical expertise, which is now enhanced by the acquisition of IMMCO and positions OEG and GTS nicely to take advantage of future RDOF (Rural Digital Opportunity Fund) project awards. The FCC’s recently announced $20.4 billion towards the RDOF program.” (See Orbital Energy Group stock charts on TipRanks)
The stock has picked up a rating from one analyst in the past three months. B.Riley Financial analyst Alex Rygiel initiated coverage of Orbital Energy Group with a Buy rating and an Orbital Energy Group price target of $7 (97.2% upside potential), more than a month ago.
According to Rygiel, Orbital Energy Group demonstrates an established platform within the solar market and a multi-hundred million dollar pipeline of projects. Based on its platform, the analyst considers the company to be well-positioned for “significant growth” in 2021 and beyond.
Furthermore, he considers the company’s foray into electric transmission and distribution, as well as the telecom infrastructure markets, with “significant share gain and acquisition opportunities,” as encouraging.
Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, the Orbital Energy Group stock is at risk mainly from two factors: Finance and Corporate, and Production, which contribute 38% and 17%, respectively, to the total risk for the stock. Within the Finance and Corporate risk category, OEG has 22 risks, details of which can be found on the TipRanks website.
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