Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Shoals (NASDAQ:SHLS) and the best and worst performers in the renewable energy industry.
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 17 renewable energy stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 5.8% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.6% since the latest earnings results.
Shoals (NASDAQ:SHLS)
Started in Huntsville, Alabama, Shoals (NASDAQ:SHLS) designs and manufactures products that make solar energy systems work more efficiently.
Shoals reported revenues of $135.8 million, up 32.9% year on year. This print exceeded analysts’ expectations by 3.6%. Overall, it was a strong quarter for the company with a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ adjusted operating income estimates.
“I’m very pleased with our third quarter’s performance, delivering revenue above the high-end of our guided range, record backlog and awarded orders of $720.9 million, and a book to bill of 1.4. We are executing our strategic plan of accelerating growth within our core domestic utility scale solar market and expanding our offering into attractive high growth applications. We remain encouraged by the strong customer reception of new products and capabilities, which allows us to continue to both grow share in key segments and diversify our business into new end markets,” said Brandon Moss, CEO of Shoals.
The stock is down 11.2% since reporting and currently trades at $9.18.
Is now the time to buy Shoals? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Bloom Energy (NYSE:BE)
Working in stealth mode for eight years, Bloom Energy (NYSE:BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Bloom Energy reported revenues of $519 million, up 57.1% year on year, outperforming analysts’ expectations by 22.8%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 20.6% since reporting. It currently trades at $89.95.
Is now the time to buy Bloom Energy? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Generac (NYSE:GNRC)
With its name deriving from a combination of “generating” and “AC”, Generac (NYSE:GNRC) offers generators and other power products for residential, industrial, and commercial use.
Generac reported revenues of $1.11 billion, down 5% year on year, falling short of analysts’ expectations by 6.6%. It was a disappointing quarter as it posted a miss of analysts’ Residential revenue estimates and a significant miss of analysts’ revenue estimates.
As expected, the stock is down 26.1% since the results and currently trades at $140.58.
Read our full analysis of Generac’s results here.
Plug Power (NASDAQ:PLUG)
Powering forklifts for Walmart’s distribution centers, Plug Power (NASDAQ:PLUG) provides hydrogen fuel cells used to power electric motors.
Plug Power reported revenues of $177.1 million, up 1.9% year on year. This number was in line with analysts’ expectations. Zooming out, it was a softer quarter as it logged a miss of analysts’ Product revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
The stock is down 19.3% since reporting and currently trades at $2.07.
Read our full, actionable report on Plug Power here, it’s free for active Edge members.
EVgo (NASDAQ:EVGO)
Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ:EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.
EVgo reported revenues of $92.3 million, up 36.7% year on year. This result topped analysts’ expectations by 0.7%. It was a strong quarter as it also produced a beat of analysts’ EPS estimates and full-year EBITDA guidance exceeding analysts’ expectations.
EVgo achieved the highest full-year guidance raise among its peers. The stock is down 8.6% since reporting and currently trades at $3.13.
Read our full, actionable report on EVgo here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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