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The company’s third-quarter revenues are expected to be between $70 million and $95 million.
For the quarter, the Zacks Consensus Estimate for revenues is currently pegged at $89.81 million, suggesting a decline of 6.75% from the figure reported in the year-ago quarter.
The consensus mark for third-quarter earnings has been unchanged in the past 30 days at a loss of 15 cents.
Stem’s third-quarter results are expected to have benefited from the EV megatrend, as the company’s solar monitoring, energy storage and Athena platform are facing increasing demand. The company’s foray into the high-growth EV market is likely to have aided its gross margin in the to-be-reported quarter.
Stem’s diversified revenue sources are also expected to have protected the company’s top-line growth against prevailing supply chain constraints. The company expects more than 90% of its remaining 2022 revenues to come from its contracted annual recurring (CAR) revenue sources and standalone projects, which diminish the supply chain constraints in its solar procurement solutions.
Stem has raised its CAR guidance from $60 million-$80 million to $65 million to $85 million for full-year 2022. This might have boosted its third-quarter revenues.
Stem’s revenues are also expected to have benefited from its new offerings, such as 13 new energy storage services and its AI-driven optimization software, Athena, which has achieved more than 100% greenhouse gas emissions reductions. This is likely to have attracted new customers, increasing Stem’s bookings for the third quarter.
STEM has also increased the utilization of its India platform, which is expected to have improved its operating margins in the third quarter by helping the company to manage its operating expenses.
The company also might have gained from its acquisition of AlsoEnergy, which is likely to have increased its offerings in clean energy intelligence and optimization software and added more than 32.85 gigawatts of solar assets under management in more than 50 countries.
However, Stem incurred significant losses in the past and expects to record net losses throughout 2022. The company attributed its recent losses to its acquisition of AlsoEnergy and expects it to continue for the rest of 2022.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
STEM currently has an Earnings ESP of +8.69% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Image: Bigstock
STEM Gears Up to Report Q3 Earnings: Here's What to Expect
Stem (STEM - Free Report) is set to report third-quarter 2022 results on Nov 3.
The company’s third-quarter revenues are expected to be between $70 million and $95 million.
For the quarter, the Zacks Consensus Estimate for revenues is currently pegged at $89.81 million, suggesting a decline of 6.75% from the figure reported in the year-ago quarter.
The consensus mark for third-quarter earnings has been unchanged in the past 30 days at a loss of 15 cents.
Stem, Inc. Price and EPS Surprise
Stem, Inc. price-eps-surprise | Stem, Inc. Quote
Factors to Note
Stem’s third-quarter results are expected to have benefited from the EV megatrend, as the company’s solar monitoring, energy storage and Athena platform are facing increasing demand. The company’s foray into the high-growth EV market is likely to have aided its gross margin in the to-be-reported quarter.
Stem’s diversified revenue sources are also expected to have protected the company’s top-line growth against prevailing supply chain constraints. The company expects more than 90% of its remaining 2022 revenues to come from its contracted annual recurring (CAR) revenue sources and standalone projects, which diminish the supply chain constraints in its solar procurement solutions.
Stem has raised its CAR guidance from $60 million-$80 million to $65 million to $85 million for full-year 2022. This might have boosted its third-quarter revenues.
Stem’s revenues are also expected to have benefited from its new offerings, such as 13 new energy storage services and its AI-driven optimization software, Athena, which has achieved more than 100% greenhouse gas emissions reductions. This is likely to have attracted new customers, increasing Stem’s bookings for the third quarter.
STEM has also increased the utilization of its India platform, which is expected to have improved its operating margins in the third quarter by helping the company to manage its operating expenses.
The company also might have gained from its acquisition of AlsoEnergy, which is likely to have increased its offerings in clean energy intelligence and optimization software and added more than 32.85 gigawatts of solar assets under management in more than 50 countries.
However, Stem incurred significant losses in the past and expects to record net losses throughout 2022. The company attributed its recent losses to its acquisition of AlsoEnergy and expects it to continue for the rest of 2022.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
STEM currently has an Earnings ESP of +8.69% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Backblaze (BLZE - Free Report) currently has an Earnings ESP of +7.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
BLZE shares have lost 29.6% in the year-to-date period compared with the Zacks Internet - Software industry’s decline of 5.3%.
Tencent Music Entertainment Group (TME - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #2 at present.
TME shares have lost 46.4% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.5%.
Upstart (UPST - Free Report) has an Earnings ESP of +114.71% and a Zacks Rank #3.
UPST shares have lost 84.3% in the year-to-date period compared with the Zacks Computers - IT Services industry’s decline of 34.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.