WLDN

Willdan is executing a real operational inflection, not a one-off. Revenue has compounded from $354M (FY2021) to $682M (FY2026, +20.5% YoY), and the mix is high-quality: the MD&A shows the Energy segment ($576M of the $682M) driven by utilities ($278M) and government ($326M) clients — sticky, non-cyclical demand tied to grid optimization, energy efficiency mandates, and a newly-called-out 'AI data center power solutions' line. Gross margin has climbed steadily from 35.2% (FY2023) to 37.5%, and operating margin from 4.3% to 6.5% (operating income +40.8% to $44.1M), evidence that scale is translating into leverage rather than being competed away. The balance sheet is being actively repaired: long-term debt fell 42% to $46.0M and current debt 75% to $2.5M, interest expense dropped from $9.4M to $5.7M, and liabilities/equity sits at a conservative 0.79x. ROE of 17.2% on a delevering balance sheet is a strong signal.

The critical caveat every investor must see: the headline +132.9% net income growth and +120.9% EPS are flattered by a $12.6M income-tax BENEFIT (vs. a $4.1M expense the prior year). Pretax income grew a more honest ~50% ($26.7M → $40.0M), and normalizing to a standard tax rate implies recurring EPS closer to ~$2.00 than the reported $3.49 — so the optically cheap 21.9x P/E is really closer to high-30s on normalized earnings. That would make the stock look expensive if earnings were the whole story.