SolarCity Corp

For 3Q16, Sunrun’s (RUN) consolidated revenue came in at ~$112 million against analysts’ expectations of $135 million.

Extreme climate change events hamper productivity, thus affecting industries such as agriculture, fishing, energy, trade, transportation, and tourism.

First Solar (FSLR) rose 5.7% yesterday after 195 nations attending the Paris climate change conference reached a historic agreement to cut emissions to address climate change.

SolarCity is a vertically-integrated solar company. Despite advancing technology and expanding reach, it has seen negative earnings most years since 2007.

Following 2Q16, major downstream solar companies such as Sunrun, SolarCity, and SunPower have revised their 2016 guidances downward.

SolarCity was founded in 2006 with the initial focused on selling, financing, and installing solar energy systems for residential and commercial customers.

Sunrun was co-founded in 2007 as a startup by Ed Fenster and Lynn Jurich, with an aim to create worldwide use of solar energy. It began offering solar services in 2008.

Among the downstream solar companies, SolarCity (SCTY) has the highest EV-to-sales value of 8.70x, which is closely followed by Vivint Solar at 8.31x.

Jim Chanos, the billionaire investor and a well-known short seller in the hedge fund industry, said at the Delivering Alpha Conference on Tuesday, September 12, 2017, that he is continuing his short position in Tesla (TSLA).

In this series, we will perform a comparative analysis of downstream solar companies’ 1Q16 earnings and SunPower’s downstream operations. We will take a close look at its management’s guidance and analyst expectations for 2016.

Jim Chanos, a prominent short seller, discussed his view on Tesla in a recent interview with CNBC. He has a short bet on Tesla (TSLA) and said, “we think the equity is worthless.”

Since the release of SolarCity’s 2Q16 results, three of the 15 analysts covering the stock lowered their price targets.

Of the 11 analysts covering Sunrun (RUN) stock, nine analysts (81.8%) gave the company a “buy” rating. Two analysts (18.2%) rated it a “hold,” and there weren’t any “sell” ratings on Sunrun’s stock on November 4, 2016.

Between its 2Q16 earnings release on August 9 and October 21, 2016, SolarCity’s stock price fell nearly 19%.

In 3Q17, Vivint Solar (VSLR) posted $34.7 million as its cost of revenue for its operating leases and incentives, higher than the $33.8 million in 2Q17 but lower than the $39.3 million in 3Q16.

Vivint Solar reported $75.1 million in consolidated revenue for 3Q17 compared to $73.0 million in 2Q17 and $41.3 million 3Q16.

Vivint Solar (VSLR) reported a cost per watt of $2.94 for 3Q17, higher than the $2.88 it reported in 2Q17 and $3.85 in 3Q16.

In October, Tesla unveiled the second version of the Powerwall and Powerpack. The second version comes with higher energy storage capacity.

For the coming quarter, analysts expect Sunrun’s (RUN) revenue to be ~$130 million, and they expect significant improvement in company revenue in the latter half of 1H17.

Sunrun (SUN) reported an operating loss of ~$51 million for 3Q16 compared to an operating loss of $48 million in 2Q16 and $63 million in 3Q15.

Sunrun (RUN) announced its 3Q16 earnings results on November 10, 2016, after market hours. Sunrun reported earnings per share of $0.16, compared to analysts’ consensus EPS estimate of -$0.20.

Vivint Solar (VSLR) reported $39.3 million in operating leases and incentives revenue costs for 3Q16 compared to $38.5 million in 2Q16 and $37.6 million in 3Q15.

Vivint Solar (VSLR) reported a record low cost per watt of $2.85 for 3Q16 as compared to $2.94 in 2Q16 and $3.12 in 3Q15.

Sunrun’s (RUN) gross profit for 2Q16 came in at $22.3 million. For 3Q16, analysts expect the company to report a gross profit of $23.3 million.

Analysts estimate that Vivint Solar (VSLR) will report revenue of $44.0 million in 3Q16, which is almost a 26.0% rise on a quarter-over-quarter basis.

SolarCity’s interest expenses have risen more than fourfold in the last two years.

FBGRX has had a below-average 2016 so far, placing seventh in our select peer group of 12 funds in terms of point-to-point returns.

Stock picks from the healthcare sector are primarily responsible for FBGRX’s poor showing YTD. Allergan has hurt the sector, with Regeneron and Celgene.

According to Tesla’s (TSLA) SolarCity acquisition proposal, it’s ready to pay $26.50 to $28.50 per share for SolarCity.

SolarCity (SCTY) reported $123 million in 1Q16 revenue against analysts’ consensus estimate of $113 million.

Downstream solar players like SolarCity (SCTY) depend on a wide variety of state and federal tax credits, incentives, and rebates to expand their businesses.

As of December 31, 2015, the cumulative installed capacity of SolarCity stood at 1,945 MW as compared to Sunrun’s 596 MW and Vivint Solar’s 459 MW.

Business expansion is crucial for companies like SolarCity, which intends to expand its presence via partnerships with homebuilders and industry leaders.

ITCs (investment tax credits) are dollar-for-dollar reductions on income taxes. These apply to the residential and commercial deployment of solar systems.

SolarCity’s business is divided into two segments: Operating Leases and Solar Energy Systems Incentives and Solar Energy Systems and Component Sales.

One out of four analysts covering Vivint Solar (VSLR) has rated the stock a “buy,” two analysts rated the stock a “hold,” and one analyst recommends a “sell” for the stock.

Sunrun is required to maintain the quality of its assets to raise capital at low cost.

The elimination of net metering system in Nevada affected the expansion plans of Vivint Solar and also led to the market exit of its peers Sunrun and SolarCity.

Vivint Solar intends to expand its presence in existing solar markets and penetrate into new markets by leveraging its brand presence and customer base.

ITCs (investment tax credits) are a dollar-for-dollar reduction on an income tax bill. It is applicable to both residential and commercial deployment of solar systems.

Vivint Solar’s business model is divided into two revenue segments: Operating Leases and Incentives and Solar Energy Systems and Product Sales.

Unlike its peers, Sunrun is building an open platform of services and tools to provide a differentiated customer experience and, at the same time, gaining a wide customer base.

In February 2014, Sunrun (RUN) acquired the residential business of REC Solar, AEE Solar, and SnapNrack from Mainstream Energy Corporation for $78.8 million.

Extension of ITCs for investments in solar energy has been key for the rapid expansion of downstream solar companies like Sunrun, Vivint Solar (VSLR), SolarCity (SCTY), and SunPower (SPWR).

Vivint Solar’s estimated nominal contracted payments remaining increased by $251.4 million during 4Q15, compared to $214 million during 3Q15.

FuelCell Energy (FCEL) is trading 42% below its 100-day moving average, as of yesterday’s close. In comparison, SolarCity (SCTY) is trading 25% below its 100-day moving average.

Wall Street analysts’ consensus estimates suggest a whopping 112% upside for renewable energy companies FuelCell Energy, Solar Energy, Power Plug, and EnerSys.

Sooner or later, a shift will likely take place from non-renewable to renewable energy sources that offer sustainable growth potential for businesses.

The Guggenheim Solar ETF, the PowerShares WilderHill Clean Energy ETF, and the VanEck Vectors Global Alternate Energy ETF invest in renewable energy.

The FCF (free cash flow) is what’s left after the total capital expenditures from operating cash flows are spent.

Clean energy was one of the important issues in the Paris Climate Agreement. Fuel cells produce clean energy from a chemical reaction between anodes and cathodes.

Experts think that OPEC (Organization of the Petroleum Exporting Countries) already sees the threat from solar and other non-fossil fuel energy sources.

Plug Power (PLUG) and SolarCity’s (SCTY) sales grew by 140% and 56% on a YoY (year-over-year) basis in fiscal 3Q15. Their gross profit grew by 56% and 99%.

The cash flow is an important part of a company’s financials. Lower cash flows increase a company’s chances of being caught in a vicious cycle of debt raising and refinancing.

Experts don’t expect the low interest rate scenario to continue in 2016. It’s important to understand the different financials related to the interest rate scenario.

Clean energy companies are trading 13% below their 100-day moving averages. FuelCell Energy (FCEL) is trading 43% below its 100-day moving average.

People want to move with technology. Technology requires power in order to run. So, fuel cells and solar energy will be a form of energy in the future.

Linking climate change to investment risks may indeed be a smart move by investors. The decarbonizing of the world is bound to have adverse effects on fossil fuel (IEO) (GUSH) and energy companies.

On July 20, 2015, SunEdison (SUNE) announced that it has entered into an agreement to acquire Vivint Solar (VSLR) for $2.2 billion in cash and stock.

SolarCity’s stock price gained 412% since December 2012. We’ll see if it can match its increasing market share with increased earnings.

Clean energy stocks also have shown about -35% growth in the last year. Social awareness and government incentives may be the factors to drive growth.

In order to counter low margins, SolarCity has been expanding into residential installations and scaling back government and commercial contracts.

Revenues from operating leases and solar energy system incentives have increased due to successful installation and operation of solar energy systems.

SolarCity’s revenues from operating leases include PPAs and proceeds from incentives. Its systems and component sales include products and services.

SunPower is moderately leveraged. Its total debt-to-fiscal 2014 EBITDA came in at 3.8x, and its total debt-to-equity ratio came in at 0.57x.

SunPower spent $68.8 million during 1H15 on capital expenditures. And it received $341.2 million from the asset transfer to 8point3 Energy LP during the same period.

FirstSolar (FSLR) gained 16.6% on August 5 in reaction to its 2Q15 earnings surprise. The company’s revenues, at $896.2 million, came in 13.7% higher than the consensus.

SunPower (SPWR) reported total cost of revenues of $310.1 million in 2Q15, or 81% of revenues. In spite of reduced revenues, the company maintained its gross margin at 19% in 2Q15.

On August 4, 2015, First Solar (FSLR) declared its 2Q15 results. It reported earnings of $896 million and net income of $94.5 million.

Interest costs dropped to $8.5 million in 2Q15 from $16.3 million in 2Q14, as SunPower refinanced its high-cost debt with low-cost debt in late fiscal 2014.

SunPower (SPWR) is a key component of the Guggenheim Solar ETF (TAN) and accounts for 5.1% of the fund’s total holdings.

In 1Q15, SunPower (SPWR) stock rose 21%, primarily due to the announcement of the joint formation of 8point3 Energy Partners (CAFD) in collaboration with FirstSolar (FSLR).

Though SunPower deployed 315 megawatts, or MW, of solar panels during the quarter, only 194 MW were considered in the calculation of revenues for this quarter.

SunPower (SPWR) is a major US manufacturer of high-efficiency crystalline silicon PV photovoltaic cells, panels, and roof tiles. The company reported $381 million in revenues in 2Q15.

As of December 31, 2014, First Solar (FSLR) had total debt of $216.9 million against $223.3 million at the end of fiscal 2013.

Despite higher volumes, First Solar’s (FSLR) cost of sales for its Components segment dropped 7% to $1.01 billion in FISCAL 2014 from $1.09 billion in fiscal 2013.

JANA Partners sold a significant stake in Dollar General (DG) in the fourth quarter. The position accounted for 2.55% of the fund’s third-quarter portfolio.

JANA Partners added a significant stake in NCR Corporation (NCR). The position accounted for 3.27% of the fund’s total fourth-quarter portfolio.