NEW YORK (AP) -- Shares of EnerNOC Inc. rose Tuesday after an analyst upgraded shares of the energy services company, saying its shares are attractive after a recent slump and a recent auction was a positive signal for its business.
THE SPARK: Needham analyst Sean Hannan raised his rating on the company to "Buy" from "Hold" and set a $7.50 price target.
THE BIG PICTURE: EnerNOC, which is based in Boston, works with businesses to cut power use on electric grids. Shares have fallen 47 percent this year.
On Monday, the company said it expects to reap over $300 million in revenue from grid operator PJM Interconnection during the 2015 and 2016 delivery year, based on the results of an auction that lines up resource providers to meet power needs.
The company will record the money as revenue in its 2015 fiscal year, Hannan said. EnerNOC had revenue of nearly $287 million in 2011.
PJM oversees the electric grid for 13 states and Washington DC.
THE ANALYSIS: Hannan noted that the company secured about $275 million in revenue in last year's auction and about $200 million in revenue the year before that. But he added that the actual realized amounts were probably lower than those estimates, making the recent auction win even more significant.
He also said he believes that the company is more focused on profitability more than market share.
THE SHARES: Up 50 cents, or 8.6 percent, to $6.30 in afternoon trading, after peaking at $6.66 earlier in the day. Over the past 52 weeks, the company's shares have traded between $5.41 and $18.75.