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NV5 Global: Engineering and Consulting

05/06/2019 5:00 am EST

Focus: INDUSTRIALS

Tom Bishop

Founder, BI Research

NV5 Global (NVEE) is a provider of professional and technical engineering and consulting solutions to public and private sectors, explains small cap expert Tom Bishop, editor of BI Research.

NV5 focuses primarily on five business verticals: construction quality assurance, infrastructure engineering and support services, energy, program management and environmental solutions.

Projects can include planning, design, engineering, permitting, inspection and field supervision, and management oversight. NV5 is growing via organic growth & acquisitions.

In April, the company announced the acquisition of JV Surveying which operates in California and Arizona conducts land surveys and mapping for commercial and utility customers. The acquisition complements NV5’s existing Alta Surveying business in the western U.S.

In March, NV5 had announced the acquisition of The Sextant Group a national, leading provider of audiovisual, information and communication technology, acoustics consulting, and design services headquartered in Pittsburgh, PA. Sextant has 11 locations across the United States and has provided its expertise on over 2,000 projects in 46 states.

The all-cash acquisitions will both be immediately accretive, but no revenue or acquisition prices were given. So while the midpoint of the 2019 guidance range for EPS of $3.51 to $3.93 given in early March was a little shy of the existing consensus of $3.88, even the mid-point reflects 15% growth in EPS and these two acquisitions will doubtless raise guidance closer to that $3.88.

While gross revenue guidance of $485 to $520 million (up between 16% and 24%), didn’t quite bracket the existing consensus of $522 million, after these two acquisitions and those to follow in the rest of 2019, I have little doubt that guidance will be rising to meet or exceed earlier unguided expectations.

The company typically starts the year out guiding conservatively and exclusive of acquisitions. Meanwhile the acquisition pipeline remains robust and NVEE has rebounded with much more to follow. Buy.

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