If you've heard of EOSE before, it's probably from the run up that happened this time last year and the subsequent debacle that has led to a 80% drawdown, worst drawdown since the 5.60 - 0.60 one after the DoE conditional agreement in 2023. They make non-flammable stationary batteries that can but don't necessarily have to compete with Li-ion (see https://investors.eose.com/news-releases/news-release-details/mn8-energy-google-and-eos-energy-enterprises-bring-advanced ), different use cases but can operate in that range. There is a longer, extended time frame thesis but I will do my best to keep the info relevant to the earnings play.
Chart:
Potential triple bottom / inverse head and shoulders here on weekly/daily.
Earnings:
EOSE has begun a trend of releasing preliminaries this year after the Q4 2026 debacle. The massive sell off was due to expectations being missed after reaffirming guidance 35 days into Q4. They have since been in the penalty box; market has lost trust (or so it seems) and needs execution and fundamentals to show up before it can be rebuilt. It seems that they have been releasing preliminaries to reconcile with this, Q1 preliminaries released 9 days after Q end, Q2 released 15 days after Q end.
Risk/reward:
This environment creates a potentially asymmetric trade, with the market discounting EOSE's execution due to Q4 2025. It is psychologically scarring to endure these drawdowns or be down 50% on an earnings play, the damage is immense. And if that's all you know about the company you will disregard it, and lose trust in management and what they say. But the last 2 quarters they have been meeting their own timelines; accurate about DOE Tranche for Line 2 coming out, Q1 revenue being similar to Q4, Subassemblies (crucial part of line design that unlocks nameplate capacity of 2GwH, important for getting to margin profitability) coming online in July like they said for Line 2. Quote from Q2 call:
"The H2 exceeds the H1, the Q4 is higher than the third. The bottom of the range takes roughly $50 million of H2 growth over the H1. That is just maintaining the run rate that we exited June with on revenue already secured through backlog and Frontier Power USA."
The difference is that in Q4 2025 they had to TRIPLE Q3 2025 revenue to meet guidance on first generation automation and they were a company learning to scale; they had supplier issues and missing redundancies to guarantee line function if something went wrong. For 2026, all they have to do is continue the run rate they already proved they could do. But the interesting part is that in June Line 2 started producing. It is a more efficient and better designed line in a new manufacturing building that isn't 100 years old (like where Line 1 is). Line 2 contributed 1% of Q2 2026 output, and adjusted gross margin was -62%, while revenue and cube shipments were up around 20% QoQ. Line 2 barely coming online and producing was masking the improvement in GM.
It is interesting that they clarified that it is the run rate they EXITED June with as well, saying that the end of June was higher than the beginning, but not because of Line 2 (1% total contribution). So Q3 is set up to have a higher initial run rate from the beginning AND Line 2 ramping.
Another quote from Q2 call:
"Hey, Chris. Lower end is basically continue the run rate of June throughout the rest of the year to get to the 300. The higher end of that is to not so much get line one up and running in Thorn Hill, but to get Thorn Hill the full 24/7 operation by the time we get into the end of the Q4."
It sounds like the higher end of guidance is contingent on them getting capacity online, not more orders.
Quote from Q2 call:
"Combined, these initiatives provide what we believe is a clear path to over 72 points of adjusted gross margin improvement over the next 12 m