Reordering the pecking order: management describes the company winning on a stage where it used to be too small to play
The model's full reasoning — Q2 2022 call → NOWe need to determine if management describes the company now competing and winning at a level of the market that used to be above it. The key is a change in tier, already real, and early. In the transcript, Cathy Zoi discusses the EVgo eXtend partnership with Pilot and GM. She says: "This GM-Pilot partnership represents the first major announcement of the EVgo eXtend offering we highlighted earlier this year." She also says: "As we have discussed, the growth in demand for EVs and the passage of the Infrastructure Investment and Jobs Act in 2021 has increased interest in charging infrastructure and communities far and wide. Our history and track record in operating complex public fast charging networks with higher liability positions EVgo as the ideal partner." And: "As part of the GM-Pilot agreement, EVgo will procure, construct, operate and maintain these charging cells, providing us with both an increase in near-term revenue and longer term contracted revenues." Also: "Since we've been a public company we've always discussed with investors our laser focus on profitability in the business and making investments only with a clear our internal rate of return or margin hurdles, and this agreement exceeds those hurdles." This indicates a partnership with a major company (Pilot) and GM, which is a large deal. But is this a change in tier? The company is EVgo, a public fast charging operator. They have been around for a while. The partnership with Pilot and GM is a significant deal, but does management convey that they are now competing at a level that used to be above them? They mention that they have a track record and are the ideal partner. They also mention that they have been selected for various programs, like the GSA BPA, and they are participating in NEVI. But the question is specifically about a change in tier, not just winning business. Look for language that contrasts with what they used to be able to compete for. For example, they say: "EVgo eXtend partnerships provide for increased growth opportunities for EVgo, while minimizing our exposure to near-term utilization risk in very nascent markets. And importantly, we are able to significantly extend EVgo's reach on a capital light basis." That suggests they are expanding into new areas, but not necessarily a tier change.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| SANG | Sangoma Technologies Corporation | Q2 2024 | 2024-02-08 | D |
| PFIE | Profire Energy, Inc. | Q1 2023 | 2023-05-13 | B |
| WD | Walker & Dunlop, Inc. | Q2 2022 | 2022-08-09 | C+ |
| PRIM | Primoris Services Corporation | Q2 2018 | 2018-08-11 | C+ |
PRIM · Q2 2018 → YESThe question is: Does management describe that the company is NOW COMPETING AND WINNING AT A LEVEL OF THE MARKET THAT USED TO BE ABOVE IT? YES The transcript shows management describing exactly this tier shift in the T&D segment: after the Willbros acquisition, the group “has been able to sign new awards with customers that have been hesitant because of previous concerns about their financial viability” and has received work from “some of the largest electrical utilities in the country.” David King notes that the work “outpaces anything he has seen in his 40-plus years,” and Pete Moerbeek adds that the one-year MSA revenue alone is now $1.1 million. Management presents these wins as a direct result of Primoris’s financial strength and parent-company backing, which previously excluded the T&D business from the largest accounts. The commentary frames the development as newly enabled and still early (only one month of T&D performance), satisfying all three required elements: a clear change in competitive tier, real business already won, and contribution still incremental relative to the company’s prior scale.
SANG · Q2 2024 → YESThe question is: Does management describe that the company is NOW COMPETING AND WINNING AT A LEVEL OF THE MARKET THAT USED TO BE ABOVE IT? YES The transcript shows management describing a shift to competing at a higher tier with sophisticated mid-market clients through bundled offerings, illustrated by a recent win with a statewide park department that larger vendors couldn't serve affordably. They explicitly note this represents a change in tier ("the type of client the bundled capabilities of Sangoma can reach ... Sangoma is well positioned to play in both the small market and more sophisticated mid-market") and that it has already produced real results ("this recent win"), while conveying it is early ("there'll be a lag before it delivers material results.
WD · Q2 2022 → YESThe question is: Does management describe that the company is NOW COMPETING AND WINNING AT A LEVEL OF THE MARKET THAT USED TO BE ABOVE IT? YES The transcript shows management explicitly describing a tier shift: from competing "predominantly with the likes of JPMorgan and Wells Fargo" to "going head-to-head with CBRE and JLL," enabled by technology investments that now allow them to "successfully compete against these much larger firms.