ERock: Upgrading to Buy; Valuation reset improves risk/reward

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ERock: Upgrading to Buy; Valuation reset improves risk/reward

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ERock

Upgrading to Buy; Valuation reset

improves risk/reward

Rating Change: BUY | PO: 16.00 USD | Price: 10.15 USD

Valuation reset creates upside to our base case 17 July 2026

We upgrade ERock (EROC) to Buy from Neutral and maintain our $16 PO. The stock’s Equity

decline from $15.47 at initiation to $10.15 (EROC -34% vs. the S&P 500 +1.9%) has

improved the risk/reward while the core thesis: AI power demand, grid constraints,

Key Changesbacklog conversion, utility partnerships, and recurring services, remain intact.

(US$) Previous Current

Inv. Opinion C-2-9 C-1-9Speed-to-power thesis through 2028 remains intact

ERock remains a differentiated speed-to-power beneficiary. Its modular gas-generation Inv. Rating NEUTRAL BUY

systems can be deployed faster than traditional utility infrastructure, helping data 2026E EPS -0.30 -0.33

centers, utilities, and C&I customers bridge power delays. Importantly, these assets can 2028E EPS 1.05 1.08

retain value after interconnection by shifting into backup, resiliency, dispatchable power, 2026E EBITDA (m) -3.9 4.1

or ancillary-service use cases. 2027E EBITDA (m) 213.4 210.0

2028E EBITDA (m) 430.7 428.1

Conservative valuation, unchanged risks

Our $16 PO remains conservatively anchored to the 2028 outlook using a 13.8x EBITDA Ross Fowler, CFA

Research Analyst

multiple, with no credit for post-2028 optionality. Risks around execution, permitting, BofAS

customer concentration, competition, regulation, and suppliers remain important, but are +1 646 855 1506

ross.fowler@bofa.com

largely unchanged; at today’s price, we believe upside now better compensates investors

Nicolas Woods

for those risks. Research Analyst

BofAS