Northwest Pipe: Larger SPP Bidding Year Expected

The Panoramic View
735 Followers

Summary

  • Northwest Pipe's 2023 revenue, gross profit margin, and net income per diluted share fell given weaker demand and a smaller bidding year for the SPP segment.
  • Management anticipates a stronger 2024 for the Precast segment and a larger bidding year for the SPP segment.
  • I think the bidding years for the SPP segment could increase as lower energy prices could increase the number of water desalination plants and subsequent demand for water transmission systems.
  • Given a pretty attractive forward PE ratio of 12.28 for 2025 and a decent balance sheet, I rate Northwest Pipe a 'Buy' and I would own it in a diversified portfolio.

Foreman and workers standing in factory

Jetta Productions Inc/DigitalVision via Getty Images

Northwest Pipe Company (NASDAQ:NWPX) is a leading manufacturer of water related infrastructure products including engineered steel pressure pipe and precast and reinforced concrete products.

Northwest Pipe's products serve markets including water transmission and

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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