The once-respected stock of the global leader in wind turbines fell 96% from its peak in 2008 to its nadir in 2012.

An almost-comedic series of managerial errors felled the stock.

Foremost among these was launching a dramatic expansion plan in the midst of the 2008-2009 financial crisis, which caused many governments to cut back on subsidies for alternative energy. In other words, Vestas expanded right when demand was collapsing.

By 2010, profit warnings were the norm for the Danish company, as stiff Chinese competition also began to bite. Vestas become an unwelcome poster child for the rise and fall of the global wind turbine industry.

But now, years later and with a new CEO (brought on in 2013), Vestas has the wind at its back once again. The industry, too, is growing rapidly again.

Comeback Kids

Vestas’ new CEO, Anders Runevad, cut about one-third of the company’s bloated workforce and closed one-third of its factories. Runevad, unlike his predecessor, is focused on cash flow, not market share.

He also had Vestas concentrate on improving three main areas: making their turbines more energy-efficient than the competitions’, growing it’s higher-margin services business, and pushing into offshore turbines (a big growth area for the industry).

Vestas is also moving into the offshore business in a joint venture with Japan’s Mitsubishi Heavy Industries (MHVYF).

So far, these moves have paid off.

On May 6, the company raised its profit guidance for 2015. It reported strong demand for its products in China, the United States, and, in particular, Brazil.

And, in the first quarter of this year, Vestas signed contracts to sell wind turbines with a total generating capacity of 1,750 megawatts. This pushed the company’s order backlog to a record €15 billion, and nearly half of that is from services contracts.

Revenue in the first quarter rose by 18% to €1.5 billion. Earnings before interest, tax, and exceptional items soared 98% to €79 million.

The backlog was the reason behind Vestas bumping up its 2015 revenue target by a billion euros to €7.5 billion. The company also raised its profit margin guidance to 8.5%, up from 7%.

This set of results seems to have completed its turnaround in a Lazarus-like revival. It also boosted its stock price to a five-year high.

But, in February, we saw the true sign of Vestas’ revival. The company announced it would pay its first dividend payment in a dozen years. The announcement came simultaneously with the report of its first full-year profit (€392 million) since 2010.

Strong Tailwinds in the Forecast

Looking ahead, it seems Vestas will have the wind at its back.

From a financial standpoint, the company now looks strong. It has a large order backlog, no net debt, and a lot of cash. Plus, it holds nearly one-fifth of its current market capitalization in cash.

The wind turbine industry also has strong tailwinds in its favor; installations are reaching record numbers. In fact, global wind generating capacity is forecast to double by the end of the decade!

The rush into wind is being led by China, the world’s biggest wind-energy market.

The Chinese added record 20.7 gigawatts (GW) of capacity in 2014, which accounts for 40% of the total installations globally. Another 77 GW of capacity is currently under construction.

Wind is now China’s third-largest source of power, behind coal and hydroelectric power. Last year, grid-connected wind power capacity in China rose 26% to 96.37 GW, which accounts for 7% of the country’s total electric capacity.

The No. 2 wind market, the United States, was also busy. It added 4.7 GW of new capacity in 2014 – a six-fold increase from 2013.

All of this bodes very well for Vestas’ continued revival.