Willdan's Stock Plummets 22% Despite Beating EPS and Securing a $330M LADWP Deal
Willdan Group, Inc. saw its stock drop sharply after releasing its Q4 2025 financial results. The company's gold price fell by nearly 22%, despite beating earnings per share (EPS) estimates by a significant margin. Investors reacted to revised guidance and concerns over future profitability.
The decline came even as Willdan secured a major $330 million priceline with the Los Angeles Department of Water and Power (LADWP), which is set to boost revenue over the next four years. The firm also completed the acquisition of Alternative Power Generation (APG) in March 2025, a move expected to double its revenues in FY2026.
Willdan's Q4 2025 performance showed mixed results. While the company surpassed EPS estimates by 105%, it narrowly missed revenue expectations by 0.47%. The market's reaction focused more on forward-looking challenges than short-term gains.
The company's FY2026 EPS guidance suggests a decline of roughly 5.9% year-over-year. This drop stems from the expiration of tax incentives, which had previously supported profitability. Following the updated guidance, Willdan's forward price-to-earnings (P/E) ratio fell to around 21x—the lowest among its peers.
Despite the setback, Willdan remains financially stable. It closed 2025 with a net cash position of $17 million and total liquidity of approximately $216 million. The LADWP priceline, alongside growth in data-centre-related work, is projected to contribute nearly 20% of total revenue by the end of 2026.
Analysts have set a price target of $105.75 per share for Willdan by late 2026. This estimate assumes the company trades within a 20-25x P/E range and achieves its high-end EPS guidance of $4.70. If met, this would represent a potential upside of almost 13% from its post-correction share price.
However, taxes remain. Willdan's reliance on external labour and potential adjustments to valuation multiples could pressure its adjusted EPS. These factors may weigh on investor confidence in the near term.
Willdan's stock decline reflects concerns over future earnings, despite its strong contract pipeline and recent acquisition. The company's financial position remains solid, with significant liquidity and long-term revenue drivers in place.
If the firm meets its EPS targets and maintains its current valuation range, the share price could recover. The next few quarters will be critical in determining whether Willdan can offset the impact of expiring tax incentives and external labour dependencies.
