EnerNoc: Best to Wait It Out

Feb.17.11 | About: EnerNOC, Inc. (ENOC)


EnerNOC (NASDAQ:ENOC) reported a big quarterly loss after the bell Wednesday, but it wasn’t as bad as analysts were expecting in a historically weak quarter. The company reported an EPS loss of .67/share (vs the analyst estimate for a loss of .83/share) on revenues of $22.7 million (vs the analyst estimate for $23 million).

What concerns me about this quarter is that growth slowed over the year ago quarter. In the year ago quarter, the company reported an EPS loss of .50/share on revenues of $26.7 million. You always want to see good quarter over quarter growth in a strong company, so the results are disappointing. However, considering the stock has been crushed in recent months (most recently due to billing concerns), the stock may not sell off tomorrow. Shares are holding steady after hours.

"We achieved all of our 2010 strategic and financial objectives, including nearly 50% expansion of our megawatts under management, strong revenue growth, and solid gross margins, resulting in GAAP net income per diluted share of $0.37 and nearly one dollar in non-GAAP net income per diluted share," commented Tim Healy, EnerNOC’s Chairman and Chief Executive Officer. "Moving forward, we expect strong utility and C&I customer demand for our offerings and robust megawatt growth in our portfolio."

Healy continued, "2011 is the first year of our next three-year operating plan, which prioritizes continued revenue and earnings growth, as well as cash flow production. We delivered on our past promises to shareholders and intend to do the same over the coming years."

Looking ahead, the company expects a Q1 non GAAP EPS loss of .64 – .84/share (analysts expected just a .55/share loss) on revenues of $25 – 31 million (analysts expected $37 million). For the full year 2011, the company expects a non GAAP EPS of .97 – 1.23 on revenues of $300 – $320 million, so way ahead of the analyst estimate for an EPS of .68, but weak on revenue guidance with analysts expecting $326 million.

Overall, I’d rate this report a C-, with the company a bit all over the board with this report and future guidance. With the recent billing concerns and less than stellar earnings and guidance, it might be best to wait it out on this demand response leader.

Disclosure: No positions