Piper Jaffray Lowers Estimates, PT On EnerNOC Following Weak Guidance

Jefferies is lowering its estimates and PT on EnerNOC ENOC and continue to encourage investors to approach this stock with caution. In guiding 2Q well below the Street, management reiterated its full year targets but did indicate that year-to-date trends are below the mid-point of the range. MW additions were strong in the quarter and gross margins are holding up, but at the expense of sharply higher SG&A. 1Q results were modestly better than expected. In reporting modestly better than expected 1Q results, operating loss of $0.76 per share vs. $0.87 consensus, ENOC reiterated its full year sales and EPS targets. However, 2Q guidance of -$0.47 to -$0.57 in loss per share on revenues of $55 to $65 million was set well below expectations of +$0.12 in EPS on $77 million in revenues. Piper Jaffray is maintaining its Neutral rating on ENOC shares owing to uncertainty in FY11 results and muted growth expectations for FY12, and it is lowering FY12 sales and EPS estimates. Piper is reducing its price target to $18 which is a function of a lower multiple and lower estimates. Piper Jaffray has a Neutral rating on ENOC ENOC closed Wednesday at $17.37