Willdan Group Inc

Willdan Group reported record quarterly profitability and raised its full-year 2026 financial targets, driven by accelerating commercial and data center demand. Contract revenue rose 33.2% to $231.0 million, net revenue grew 23.5% to $117.2 million, and adjusted EBITDA jumped 50.6% to $33.0 million, yielding a record 28.2% margin on net revenue. GAAP diluted EPS increased 53.4% to $1.58, while adjusted diluted EPS grew 38.0% to $2.07. The company now expects full-year net revenue of $415 million to $430 million, adjusted EBITDA of $103 million to $107 million, and adjusted diluted EPS of $5.00 to $5.15. Management highlighted a $110 million LADWP solar streetlight expansion, a $53 million City College of New York central plant upgrade, and a $49 million SoCalREN energy efficiency award among recent contract wins.

Zacks Investment Research identifies UL Solutions, Willdan Group, and ZipRecruiter as three business services stocks well-positioned for near-term growth amid a prospering industry driven by AI adoption and strong service activities. The Zacks Business-Services industry, which carries a Zacks Industry Rank of 108, has underperformed the broader market over the past year, declining 34.1% compared to the S&P 500's 23.9% gain, and currently trades at a forward price-to-earnings ratio of 13.31. UL Solutions is expanding its global platform with new testing facilities and AI-powered software, with its 2026 consensus earnings estimate rising 3.2% to $2.26 per share. Willdan Group has secured multiple contracts including a $100 million extension with Southern California Edison and a $54 million modernization project, and its recent acquisition of Burton Energy Group is expected to boost 2026 earnings, with the consensus estimate increasing 8.3% to $4.94 per share. ZipRecruiter is enhancing its AI-powered hiring tools and resume database, and its 2026 consensus loss per share has narrowed by 50% to 8 cents.

Willdan Group released its June investor presentation, detailing how its consulting, engineering, and implementation services address data center cooling and grid planning. The company works on mission-critical campuses, offering engineering, energy assessments, controls integration, procurement, and construction management. It cited an Evoque Data Centers project that achieved 1.5 million kilowatt-hours of annual savings through cooling system optimization, setpoint adjustments, and improved controls. Willdan's exposure to the thermal-management problem in AI data centers comes from its work in energy efficiency, utility interconnection, load forecasting, and facility systems rather than direct liquid-cooling hardware.

A bullish thesis on Willdan Group, Inc. was published on InfoArb Sheets' Substack, highlighting the company's strong growth and margin expansion driven by rising electricity demand and data center-related power infrastructure. The thesis notes that the Burton Energy acquisition is reshaping the revenue mix, lifting commercial exposure to roughly a quarter of the business and improving profitability, while the APG segment is rapidly scaling in data center power-block work and battery storage solutions, with potential to more than double and possibly triple in the near term. First quarter 2026 results showed normalized net revenue growth of 16.6% and Adjusted EBITDA growth of 35%, and management signaled confidence in margin expansion toward the mid-20s in 2026 with a long-term path into the high-20s. The balance sheet remains strong with low leverage, and additional catalysts include LADWP ramp contributions, cross-selling from Burton, and growing exposure to AI-driven grid constraints. Willdan's share price was $92.68 as of June 17th, with trailing and forward P/E ratios of 25.28 and 19.19 respectively.