EnerNOC (Nasdaq) Posts Solid Results, Raises Guidance

Aug 08, 2008
Author: SCP Editor

August 8, 2008 – EnerNOC (Nasdaq:ENOC) reported Q2 results yesterday, with a net loss of $10.4 million, or $(0.54) per share, on revenue of $23.6 million, up 97% Y/Y. Management also increased guidance for FY 2008 revenue from a range of $99 to $105 million to a range of $101 to $107 million. The stock is currently trading, in our opinion, at a substantial discount to current and projected performance. In our commentary on EnerNOC, July 23, we said that:

“…based on our target revenue for 2008 ($103 million) and a 20% discount to the current 6.9x P/S (2007)  multiple, that the stock is getting today, we think the stock could trade as high as $28..”

Well, since then, the stock pulled back all the way to a low of $13.28 on an intraday basis on August 4, which we think was way oversold. In fact, we wrote on July 29, as much suggesting that “…based on our target revenue for 2008 ($103 million) and at a 5.5x P/S multiple. That the stock could trade as high as $28…”

We maintain that a 5.5x P/S multiple is reasonable, especially in light of the company’s most recent reported performance and increase in guidance. The secular trends remain incredibly compelling, and we will maintain our revenue target, which now sits at the low end of management’s $101 to $107 million guidance for this year.

Disclosure Note: SCPEditor is LONG ENOC.