Spotting Winners: Stem (NYSE:STEM) And Renewable Energy Stocks In Q2
As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the renewable energy industry, including Stem (NYSE:STEM) and its peers.
Renewable energy companies are buoyed by the secular trend of green energy that is upending traditional power generation. Those who innovate and evolve with this dynamic market can win share while those who continue to rely on legacy technologies can see diminishing demand, which includes headwinds from increasing regulation against “dirty” energy. Additionally, these companies are at the whim of economic cycles, as interest rates can impact the willingness to invest in renewable energy projects.
The 15 renewable energy stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 9.3% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
While some renewable energy stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.7% since the latest earnings results.
Stem (NYSE:STEM)
Focusing on clean energy, Stem (NYSE:STEM) has developed from a battery storage startup to an AI-driven energy management company.
Stem reported revenues of $34 million, down 63.4% year on year. This print fell short of analysts’ expectations by 46.9%. Overall, it was a disappointing quarter for the company with full-year revenue guidance missing analysts’ expectations.
“Our financial performance during the second quarter was a disappointment,” said John Carrington, CEO of Stem.
Stem delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 67.5% since reporting and currently trades at $0.32.
Is now the time to buy Stem? Access our full analysis of the earnings results here, it’s free.
Best Q2: Sunrun (NASDAQ:RUN)
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ:RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Sunrun reported revenues of $523.9 million, down 11.2% year on year, outperforming analysts’ expectations by 1.2%. The business had a stunning quarter with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 17% since reporting. It currently trades at $19.26.
Is now the time to buy Sunrun? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Blink Charging (NASDAQ:BLNK)
One of the first EV charging companies to go public, Blink Charging (NASDAQ:BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services.
Blink Charging reported revenues of $33.26 million, up 1.3% year on year, falling short of analysts’ expectations by 14.5%. It was a disappointing quarter as it posted a miss of analysts’ arnings estimates.
As expected, the stock is down 32.8% since the results and currently trades at $1.70.
Read our full analysis of Blink Charging’s results here.
Fluence Energy (NASDAQ:FLNC)
Pioneering the use of lithium-ion batteries for grid storage, Fluence (NASDAQ:FLNC) helps store renewable energy sources with battery systems.
Fluence Energy reported revenues of $483.3 million, down 9.9% year on year. This result beat analysts’ expectations by 4.4%. Zooming out, it was a mixed quarter with full-year revenue guidance missing analysts’ expectations.
The stock is up 61.3% since reporting and currently trades at $22.35.
Read our full, actionable report on Fluence Energy here, it’s free.
EnerSys (NYSE:ENS)
Supplying batteries that power equipment as big as mining rigs, EnerSys (NYSE:ENS) manufactures various kinds of batteries for a range of industries.
EnerSys reported revenues of $852.9 million, down 6.1% year on year. This number lagged analysts' expectations by 2.7%. Aside from that, it was a mixed quarter with full-year revenue guidance exceeding analysts’ expectations.
The stock is up 4.3% since reporting and currently trades at $99.29.
Read our full, actionable report on EnerSys here, it’s free.
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