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Pattern Energy (PEGI) Up 0.3% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Pattern Energy (PEGI - Free Report) . Shares have added about 0.3% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Pattern Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Pattern Energy Q3 Loss Wider Than Expected, Sales Lag

Pattern Energy Group reported a loss of 53 cents in third-quarter 2019 versus a loss of 13 cents per share in the year-ago period. The Zacks Consensus Estimate was pegged at loss per share of 1 cent.

Total Revenues

Third-quarter revenues amounted to $119 million, which lagged the Zacks Consensus Estimate of $139 million by 14.4%. However, total revenues were 0.9% higher than the prior-year figure.

Quarterly Highlights

Pattern Energy sold 1,735,937 megawatt hours (MWh) of electricity on a proportional basis compared with 1,622,991 MWh in the year-ago quarter. The 7% improvement was primarily caused by volume increases resulting from acquisitions and less favorable wind conditions in 2018.

Total operating expenses amounted to $29 million, reflecting an increase of 81.3% from the year-ago level.

The company incurred interest expenses of $27 million compared with $28 million in the year-ago quarter.

Financial Highlights

As of Sep 30, 2019, the company had cash and cash equivalents of $106 million compared with $101 million on Dec 31, 2018.

Its long-term debt was $2,172 million as of Sep 30, 2019, up from the Dec 31, 2018 level of $2,004 million.

The company’s cash flow from operating activities in the first nine months of 2019 was $118 million, down from $230 million recorded in the comparable year-ago quarter.

Guidance

Pattern Energy reaffirmed 2019 annual cash available for distribution in the range of $160-$190 million. The company also reaffirmed 2020 cash available for distribution in the band of $185-$225 million.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -62.96% due to these changes.

VGM Scores

Currently, Pattern Energy has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Pattern Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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