Of the six analysts covering Vivint Solar (VSLR) stock, two of them, or 33.3%, have given the company a “buy” rating. Two more, or 33.3%, have rated it a “hold,” and another two, or 33.3%, have given it a “sell” rating as of July 20, 2016.
Since the release of Vivint Solar’s 1Q16 results, there were no upward or downward revisions in company’s target price. As of July 20, 2016, Vivint Solar’s consensus 12-month target price was $5.63. This indicates a nearly 78% return potential considering a $3.16 closing price on July 20, 2016.
Vivint Solar’s consensus estimates
Analysts expect Vivint Solar to report a strong top-line growth in 2Q16. They see a nearly 45% increase in consolidated revenue on a quarter-over-quarter basis and a nearly 55% increase compared to 2Q15 revenues.
Vivint Solar is in its growth phase. It’s a rapidly growing company. So it’s reasonable to compare QoQ (quarter-over-quarter) data rather than YoY (year-over-year) results.
For 2Q16, analysts expect improved EBITDA (earnings before interest, tax, depreciation, and amortization) and EBITDA margins.
This is in line with the company’s continued focus on cost reductions and increasing operational efficiency across revenue-generating segments. As of March 31, 2016, Vivint Solar’s (VSLR) total cost per watt stood at $3.34 compared to Sunrun’s (RUN) $4.11 and SolarCity’s (SCTY) $3.18.
Among the six firms covering Vivint Solar stock, Goldman Sachs (GS) recommended a “sell” with a price target of $2.25 assigned on April 15, 2016. Credit Suisse gave a “neutral” recommendation on the stock with a price target of $5 assigned on May 10, 2016.
In the next part of this series, we’ll analyze analysts’ 2Q16 revenue estimates for Vivint Solar (TAN). We’ll find out whether these recommendations are conservative or optimistic.