Willdan Group's (WLDN) recent acquisition of engineering consulting firm KCS will support faster conversion of its Alternative Power Generation unit's substation-design backlog for data-center buildout projects, Wedbush Securities said Tuesday in a report.

APG remains constrained by a limited supply of licensed power engineers, with substation and transmission design requiring specialized electrical-engineering expertise, the report said. KCS' engineering talent enables APG to handle its full capacity of 20 data-center projects, up from the 10 currently in its pipeline, Wedbush said.

APG remains the most important driver for Willdan's stock valuation, and the KCS acquisition shows the company is addressing the unit's constraints, Wedbush said. Any Q3 update showing APG growth acceleration will be the next catalyst to watch, the report said.

Wedbush maintained its outperform rating on Willdan stock and its $130 price target.

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