Saturday, April 12, 2014

Seeking Alpha: EnerNOC Working, But The Outlook Still Cloudy

I liked demand response and energy management company EnerNOC (ENOC) six months ago and the stock has done well since, rising about 40% as the brutal winter weather brought attention back to the advantages of electricity demand response. I still like this company, particularly as the company shifts its attention to international DR markets and the sizable opportunities in providing enterprises with tools to better analyze and manage their energy needs.

The prime issue with EnerNOC remains the volatile regulatory environment. PJM Interconnection, a major source of EnerNOC's revenue, is serious about altering its rules for demand response and those changes threaten a meaningful portion of today's revenue and cash flow. Over time the company's efforts to diversify and the underlying advantages of DR should smooth this out, but the company's reported performance could be erratic in the meantime. That complicates valuation, though today's price does not seem unreasonable.

Read more here:
EnerNOC Working, But The Outlook Still Cloudy

No comments: