Is Capstone Turbine (CPST) a buy?

Capstone Turbine (Public, NASDAQ:CPST) the kingpin when it comes to Microturbine technology, has posted double digit gains YTD. If you bought on January 1st, you’d have a nice gain of 52% today. 

Capstone 1 Year Chart:

Notes from the last Earnings call include:

The Chatsworth, Calif.-based company said late Monday it posted a loss of $9.8 million, or 7 cents per share, compared with a year-ago loss of $10.4 million, or 7 cents per share. The company had about 7,000 more shares outstanding in the current quarter.

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Revenue jumped 34 percent to $7.5 million, from $5.6 million a year earlier.

Analysts were expecting, on average, a loss of 5 cents per share, with revenue of $9.7 million, according to a poll by Thomson Reuters.

Capstone shipped 89 units in the first quarter of fiscal 2009, compared with 77 units in the same period last year.

The company attributed its narrower loss to higher sales of its C30 and C60 series models, as well as lower warranty expenses and slimmed overhead costs. These factors were somewhat offset, however, by higher manufacturing costs.

Capstone also noted its order backlog at the end of the first quarter was 7 times higher than it was a year ago.

According to the rumor mill, Capstone CEO Darren Jamison let slip that the company could easily do $50 million in revenues this year with profitability by 2012 a "reasonable date." While the microturbine maker's lawyers undoubtedly pulled their hair out upon reading the Bloomberg article, they quickly put out a release saying the company doesn't publicly disclose internal financial projections. That's closing the barn door after the horse has escaped.

$50 million in sales this fiscal year equates to a 60% growth rate over fiscal 2007. As CPST achieved a 49% growth rate last year, this suggests sales are ramping up fairly significantly though whether microturbines will achieve enough placement to warrant Jamison's profitability forecast remains to be seen.

So where does that leave us? Clouded by the dark side, Capstone Turbine’s future has become (as Yoda would say) Personally, I would wait until the stock falls below $2 before thinking of buying - and look for the long term on this one.