Allied Motion Stock Price Doubled, Robust Backlog Supports Uptrend

Allied Motion

Allied Motion Technologies (NASDAQ:AMOT), a designer and manufacturer of precision motion control products and solutions, continues impressing investors with its financial and operational performance. Its strategy of growing and diversifying the revenue base in many of its served markets enhances its future fundamentals and financial numbers.

Allied Motion stock price soared 98% in the last twelve months, extending the five-year rally to 500%. AMOT stock has the 52-week trading range of $19.43 – $42.70 – with the market capitalization of $386 million.

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Allied Motion Financial and Operational Performance

Allied Motion generated revenue growth of 18% in the final quarter of last year, driven by year-over-year demand increase from the industrial/electronics, medical, and A&D markets. The full-year revenue has hit the record level of $252 million from $246 million in past year.

Its efficient management has helped it in turning strong revenue growth into big profits. Allied Motion generated 120 basis point margin improvements in gross margin, while G&A expenses declined to 10.6% of sales from 12.3% in the prior year period. Consequently, its operating income doubled in Q4 over the prior year period to $5.2 million.

We are building momentum, and we entered 2018 with a stronger foundation, which includes an improved diversification of the business, recent significant project wins, and a record backlog. We continue to see a very fertile ground of opportunities across all of our served markets,” CEO said.

Order backlog and Acquisition Strategy Adds to Sentiments

Orders for its products and services rose 29%Y/Y in Q4 to a new record $72.7 million, while full-year orders jumped 8.6% from 2016. The company has also announced that they are working on the strategy of acquiring small companies that are aligning to its future strategy.

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Allied Motion’s cash position will enable it to expand the revenue base through acquisitions. The company generated $25 million in operating cash flows in fiscal 2017, and its capital expenditure was standing around $6 million. Thus, the company was left with $19 million free cash flows. It reduced the debt by $18 million in fiscal 2017 using its free cash flows, which has strengthened its balance sheet and the potential for investments in growth opportunities.

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