Why Eos Energy Stock Jumped Over 20% Today
Key Points
Eos Energy is ramping up production and deliveries of its battery storage systems.
A new agreement with financial backing represents a significant milestone for this young company.
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Shares of Eos Energy Enterprises (NASDAQ: EOSE) are firing up today, surging 23% in early Wednesday morning trading and settling in around 10% higher as of noon.
You probably haven't heard about Eos Energy. It's a battery energy storage systems (BESS) company known for its zinc-based battery technology. It just delivered explosive revenue growth and announced a partnership that changes the narrative about the company and its prospects.
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What's driving Eos Energy's revenue?
First up, the numbers. Eos Energy's revenue jumped 445% to $57 million in Q1, driven by higher deliveries, better prices, and higher revenue from the sale of components to third parties.
Eos automated more of its factory production and delivered 5.7 times more battery "cubes", or storage units or modules than last year.
Moreover, Eos reported earnings of $0.12 per share versus a net loss of $0.20 in the year-ago quarter.
Does that mean Eos has suddenly become profitable? Not quite, but something more important happened this morning.
The big partnership, and what it means for Eos Energy
That net profit was driven by non-operating items. Eos Energy's gross and operating losses widened during the quarter as costs shot up, and that trend will likely persist as it scales production and deliveries.
The sharp rise in deliveries, however, means Eos is now producing and delivering far more battery systems than before. More importantly, Eos also announced a partnership this morning with global alternative investment firm, Cerberus Capital, to create Frontier Power USA, an independent company that will build and operate long-duration energy storage projects using Eos Energy's zinc battery technology. Cerberus is committing $100 million to the venture, with Eos signing an agreement to supply 2 gigawatt-hours (GWh) to Frontier Power.
This is a significant deal because it signals that Eos is becoming bankable enough to secure financing for large-scale projects, which is critical for commercializing and scaling its technology. That's something critics have long questioned about the company.
Eos also reaffirmed its full-year revenue guidance of $300 million to $400 million and has a backlog of $644.6 million, representing 2.6 GWh of capacity. It pegs its commercial pipeline at $24.3 billion. Those are impressive numbers, and make Eos Energy a stock worth watching closely.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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