Guggenheim Solar ETF

In this series, we’ll look at the structure of the thermal power industry before moving on to focus on the power generation equipment sector.

The power generation equipment industry is made up of various sub-industries, each with a structure of its own.

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

Canadian Solar (CSIQ) is expected to announce its 2Q16 earnings results before market hours on August 15, 2016.

Canadian Solar’s revenues from the sale of electricity in 3Q17 totaled $9.6 million, which was marginally lower than $9.8 million in 2Q17.

Southern Company (SO) is one of the leading utility companies (XLU) in the US. The company has a history of stable performance.

Yingli Solar’s cost performance mainly depends on the price of its key raw material, polysilicon.

In November 2011, JA Solar announced the acquisition of a 100% equity interest in Silver Age Holdings.

SunPower (SPWR) reported about $380 million in consolidated revenue for 3Q15. Analysts estimate that the company will report revenue of $778 million in 3Q16, which is close to a 105% increase on a year-over-year basis.

For 1Q16, SunPower reported EBITDA of $6.3 million, which fell far short of the analyst expectation of $11.5 million.

Canadian Solar reported about $637 million in consolidated revenue for 2Q15. Analysts estimate that it will report revenue of about $726 million in 2Q16.

SunPower reported about $381 million in consolidated revenue for 2Q15. Analysts estimate that the company will report revenue of $339 million in 2Q16.

JA Solar Holdings (JASO) reported $12.1 million as interest expense for 3Q17 compared to $12.4 million in 2Q17 and $11.3 million in 3Q16.

Of the 18 analysts tracking Xcel Energy, 13 recommend it as a “hold,” five recommend it as a “buy,” and none recommend it as a “sell.”

Vivint Solar has witnessed rapid growth since inception with installed capacity reaching 129.7 megawatts as of June 30, 2014. The company went public on October 1, 2014.

The Guggenheim Solar ETF (TAN) extended its gains by 1.2% on April 22.

SolarCity posted mixed results for 1Q16. The company reported adjusted EPS of -$2.56 compared to the analyst consensus EPS estimate of -$2.31.

First Solar (FSLR) is expected to announce its 2Q16 earnings results on August 4, 2016, after market hours.

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

Four out of 11 analysts covering Trina Solar have rated the stock a “buy.” Six have rated the stock a “hold,” and one recommends a “sell” for the stock.

The major factors that led to SunEdison’s bankruptcy were leveraged acquisitions and the liquidity crisis. More than the macro factors, SunEdison’s fall appears to be self-made.

Sunrun (RUN) announced its 1Q16 earnings results on May 12, 2016. In this series, we’ll look at the 1Q16 results, compare them with analysts’ estimates, and see the factors behind deviations.

JA Solar (JASO) is primarily involved in the design, development, manufacturing, and sales of solar power products based on crystalline silicon technologies.

Wall Street analyst consensus estimates suggest a whopping 106% upside for the four biggest renewable energy companies.

Vivint Solar (VSLR) will announce its 2Q16 earnings results on August 8, 2016, after Market hours. In this series, we’ll look at analysts’ expectations for 2Q16 and 2016 guidance.

Solar stocks have been a sweet spot among equities this year. On average, they’ve gained 50% this year, notably outperforming broader markets.

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.

While REITs started trading in 1951 and MLPs started off in 1981, the first yieldco was floated in 2005 by Seaspan Corporation, a shipping company.

All ten solar players on our coverage list fell during the week. The SPDR S&P 500 ETF fell 0.5% during the same week.

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.

Wall Street analyst consensus estimates suggest a whopping 88% upside for these four renewable energy companies as of January 12, 2016.

SunPower (SPWR) is expected to announce its 2Q16 earnings results on July 26, 2016, after market hours.

While First Solar has traditionally been manufacturing thin-film CdTe modules, which don’t require polysilicon, their prices have fallen in recent years.

Yingli Solar (YGE) offers products and services that span the entire value chain of integrated power products.

For 3Q16, analysts expect Yingli Solar to report a gross profit of about $31.0 million with a gross margin of about 12.4%, which is in line with the company’s gross margin guidance.

Of the six analysts covering Vivint Solar (VSLR) stock, two have given the company a “buy” rating, two a “hold” rating, and two a “sell” rating.

New York-based Consolidated Edison (ED) is expected to report its earnings on August 4, 2016. According to analyst estimates, it’s expected to report earnings of $0.69 per share.

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.

Trina Solar (TSL) had given shipment guidance of 1,500 MW (megawatts) to 1,600 MW for 2Q16. However, the company reported 1,658.3 MW of solar (TAN) module shipments recognized in its revenue for 2Q16.

Carbon dioxide emissions declined significantly in the last decade as a result of power generation’s shift from coal to lower-emitting sources.

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%.

The Guggenheim Solar ETF (TAN) gained 0.9% on April 21. American solar stocks account for 47% of the fund’s holdings, and Chinese solar stocks account for another 44%.

FirstSolar (FSLR) nailed its 2Q15 earnings. The company’s focus on solar power differentiates it from SunEdison (SUNE).

JA Solar (JASO) stock fell nearly 39% from January 4, 2016, through September 22, 2016.

There has been a flurry of positive indicators supporting solar stocks recently.

According to the DOE, roughly 400,000 households were powered by rooftop solar panels in 2013. That isn’t even 1% of the total households in the US.

The European Union decided to review a minimum import price agreement for Chinese solar panels, pulling the solar stocks down.

Wall Street analysts’ consensus estimates suggest a combined upside of 137% for FuelCell Energy, SolarCity, Plug Power, and EnerSys

In 4Q17, Canadian Solar expects its solar module shipments to reach ~1.7–1.8 GW.

SolarCity initially raised funds through the issue of warrants to investors on preferred stock. It also raised capital through a range of investment funds.

Southern Company (SO), together with its subsidiaries, has a presence in both the regulated and unregulated segments of the power utility (XLU) business.

As of December 9, 2016, among its major peers, Yingli Solar had the highest forward EV-to-EBITDA multiple of 14.3x.

Yingli Solar (YGE) reported about 365 MW of solar (TAN) module shipments for 3Q16, as compared to 662 MW in 2Q16 and 460 MW in 3Q15.

The extension of the investment tax credit for owning eligible solar systems and a decrease in solar hardware prices provide a strong growth opportunity for downstream solar companies.

A yieldco should have enough operating projects to diversify risks related to operations, geography, and creditworthiness.

Moving ahead, Sunrun (RUN) expects to deploy about 285.0 megawatts in fiscal 2016—compared to 202.9 megawatts in fiscal 2015.

Analysts expect a fall in JA Solar’s revenue in 3Q16. They anticipate that consolidated revenue will fall 7% on a quarter-over-quarter basis.

JA Solar’s total cost of sales for 3Q17 was $575.4 million compared to $778.9 million in 2Q17 and $539.3 million in 3Q16.

Overall, 2019 turned out to be volatile for solar stocks. However, there were some bright spots among broader markets last year.

Enphase Energy (ENPH) stock started off 2020 with a bang and surged more than 12% on January 2. Solar stocks also gained yesterday.

Wall Street analysts have given First Solar a mean target price of $70.9, which indicates a potential upside of 22% for the next 12 months.

Enphase Energy (ENPH) is trading 24x its EPS of $0.98 for the next 12 months—reasonable for a growth stock. SolarEdge (SEDG) is trading 17x its forward EPS.

First Solar stock lost 3.4% last week after the US Court of International Trade blocked the Trump administration from withdrawing a tariff exemption.

SunPower announced its plans to spin-off businesses into global solar panel manufacturing and US distributed solar generation and storage.

First Solar’s (FSLR) third-quarter earnings didn’t boost its stock. Investors were disappointed with wide misses on the revenues and earnings front.

SunPower (SPWR) surprised investors with strong third-quarter earnings on October 30. It reported EPS of $0.07, beating analysts’ consensus estimate.

Yesterday, solar inverter maker Enphase Energy (ENPH) yet again reported record earnings, marking its fourth consecutive profitable quarter.

Solar inverter maker Enphase Energy (ENPH) stock was up more than 4% at 11:10 ET today. ENPH recovered after it fell more than 8% yesterday.

Enphase Energy (ENPH) stock rose about 4% on October 17. ENPH has risen steadily this month after a sharp drop, and it has gained almost 430% YTD.

Solar stocks highlighted the top-rallied sectors this year. After hitting multiyear highs, many solar stocks have fallen as much as 40% since August.

Solar stocks have had a great run this year. Strong demand, falling costs, and higher corporate investments have supported these renewables in 2019.

Trade war intensified in August and that took a toll on the broader markets. However, solar stocks were largely positive and hint at future demand.

Almost all solar stocks fell sharply on September 26. First Solar (FSLR) fell about 7% yesterday while this year’s top gainer, Enphase Energy, fell 7.5%.

Top solar stock First Solar (FSLR) has surged about 10% in September. FSLR is trading close to its 52-week high and might continue to march upward.

Enphase Energy stock had a solid week, gaining more than 20%. Its recovery is notable after its ~25% correction since its all-time high late last month.

Short-seller Citron Research noted that Generac Holdings could challenge solar microinverter makers Enphase Energy and SolarEdge’s duopoly.

Almost all the solar stocks have had a fantastic run so far this year, and First Solar (FSLR) is no exception. FSLR stock is up more than 45% year-to-date.

Enphase Energy has fallen almost 20% from its all-time high of $35.4. The stock is still sitting at a huge gain of approximately 500% this year.

First Solar (FSLR) stock fell more than 10% from its 52-week high early this month. In a strong solar environment, FSLR stock has gained more than 45% YTD.

Solar microinverter company Enphase Energy (ENPH) has rallied more than any other stock in the space this year with a more-than-600% gain.

Solar stocks have been on an impressive run this year. So far, Enphase Energy (ENPH) stock has risen more than 530% in 2019.

Solar stocks started last week significantly lower due to increased trade war concerns. The solar energy space is one of the hottest sectors this year.

FirstSolar (FSLR) and SunEdison (SUNE) published their 2Q15 earnings on August 4 and August 6, respectively. The results starkly contrasted with each other.

First Solar (FSLR) reported its second-quarter earnings results yesterday. It reported EPS of -$0.18 for the quarter.

On Wednesday, SunPower reported its second-quarter earnings after the markets closed. The company reported an adjusted loss of $0.22 per share.

First Solar (FSLR) is scheduled to release its first-quarter earnings on May 2. First Solar is expected to report total revenues of $624.0 million.

First Solar (FSLR) stock rose more than 8% on April 10 and closed almost at its ten-month high.

Let’s look at the current valuations for the top solar stocks in this part of our series. First Solar (FSLR) stock is currently trading at a forward EV-to-EBITDA valuation of 7x.

2019 could be a lot better and a step in a different direction for the solar energy sector as a whole. Solar stocks have already performed well so far.

Since Tesla’s (TSLA) inception, analysts have remained divided in terms of its future growth prospects.

First Solar (FSLR) released its fourth-quarter and full-year 2018 earnings on February 21.

Solar stocks started 2019 on a solid note. So far, the Invesco Solar ETF (TAN) has risen more than 30% in 2019.

SunPower reported its fourth-quarter and fiscal 2018 financial results on February 13. The company reported an adjusted loss of $0.21 per share.

In the past year, First Solar (FSLR) stock returned -37%, while SunPower (SPWR) returned -41%.

First Solar stock is trading at a forward PE ratio of 18x. On average, solar stocks (TAN) are trading at a forward valuation multiple of 14x.

First Solar (FSLR) stock is trading at a forward EV-to-EBITDA multiple of 4x based on analysts’ earnings estimates for 2019.

In 3Q16, Yingli Solar (YGE) posted nearly $218.9 million in total revenues. Analysts estimate that it will report ~$242 million in revenues in 3Q17.