ESS Tech Inc Shares Plummet

Shares in ESS Tech Inc (NYSE:GWH) declined nearly 19% in premarket trading Thursday after the energy storage solutions provider reported disappointing results for fiscal Q3 2024.

The company reported a third-quarter loss per share of $1.90, significantly wider than the anticipated loss of $0.10. ESS generated revenue of just $360,000 for the period, falling short of the $5.29 million consensus estimate.

CEO Eric Dresselhuys commented, "We continue to make strong progress on our key operational initiatives, but have faced challenges that have delayed our revenue ramp." He highlighted that an Australian customer achieved important milestones, securing contracts with major utilities and obtaining funding to build a factory to meet high demand for long-duration energy storage in Queensland.

However, delays in finalizing this funding have affected ESS's ability to ship and recognize revenue in Q3 for units already built. Dresselhuys expressed optimism, stating, "We are receiving payments and are shipping units now… that should lead to $9 to $11 million in revenue for the year, resulting in meaningful year-on-year growth."

Following the disappointing report, Oppenheimer analysts downgraded ESS stock to Perform as they seek clarification on the company's capitalization. They mentioned, "We continue to see a significant need for long-duration storage technologies and believe GWH will prove a long-term leader in the segment."

Baird analysts also adjusted their rating on the stock to Neutral, citing current market conditions and slow adoption. They stated, "We would look for signs of increased adoption/installations combined with additional financing before being buyers," lowering the price target for ESS shares from $14 to $9.