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

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.”

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.

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.

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.

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

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.

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.

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).

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

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

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.

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.

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.

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 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.

Currently, only one analyst is covering Yingli Solar (YGE) stock. The analyst gave the company a “sell” (or 100%) rating.

Yingli Solar will announce its 3Q17 earnings results on December 6 before market hours. Since its 2Q17 earnings, its stock price has fallen nearly 13.1%.

In 3Q17, JA Solar reported total revenues of $652.6 million compared to $878.2 million in 2Q17 and $624.3 million in 3Q16.

On November 15, 2017, after market hours, JA Solar Holdings (JASO) announced its 3Q17 results for the quarter ended September 30, 2017.

Canadian Solar (CSIQ) reported its 3Q17 earnings results on November 9. CSIQ declared earnings per share of $0.22, slightly below the analyst consensus estimate of $0.26.

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.

Vivint Solar posted $75.1 million in revenues in 3Q17, up by 82% on a YoY (year-over-year) basis.

SunPower (SPWR) reports its revenue under the power plant, residential, and commercial segments. The latter two segments are together called the distributed generation segments.

SunPower (SPWR) announced its 3Q17 earnings before market hours on November 2. In this series, we’ll examine SunPower’s 3Q17 results in detail and compare the results with analysts’ estimates.

SunEdison (SUNEQ) formed TerraForm Global in early 2015 to own and operate renewable energy assets in emerging markets.

SunEdison (SUNEQ) announced the intent to acquire residential rooftop solar (TAN) power provider Vivint Solar (VSLR) on July 19, 2015. However, the market reacted negatively.

Factors that spearheaded SunEdison’s bankruptcy were leveraged acquisitions and the liquidity crisis.

First Solar (FSLR) produces solar energy equipment. In this series, we’ll look at its performance and the outlook for the industry.

Relative valuation PE (price-to-earnings) and EV-to-EBITDA multiples are commonly used to determine relative valuation. The forward PE multiple considers a company’s equity based on earnings forecasts for the next 12 months. On September 29, 2017, First Solar’s forward PE multiple was reported to be 21.9x. This PE multiple was higher than JA Solar’s (JASO) 9.1x and Canadian Solar’s […]

Debt profile As of December 31, 2016, First Solar (FSLR) had total debt of $188.4 million, lower than its debt of $289 million at the end of 2015. The company’s debt is denominated in various currencies, including the US dollar, Malaysian ringgit, and euros. Credit metrics With a net worth of over $5 billion and $555.8 […]

Pre-tax loss First Solar’s (FSLR) pretax loss in 2016 was $471.7 million, compared with a profit of $519.8 million in 2015. The loss could be attributed to the huge $729 million restructuring pre-tax charges faced by the company in the fourth quarter of 2016. Net loss in 2016 First Solar reported a net loss of $358.0 […]

Cost of sales First Solar’s (FSLR) Components segment saw its cost of sales rise 6% to $1.1 billion in fiscal 2016, from $1.0 billion in fiscal 2015. On the other hand, despite higher volumes, the Systems segment’s cost of sales fell 29% to $1.1 billion in fiscal 2016 from $1.6 billion in fiscal 2015. Overall, the company’s cost […]

Revenue trend First Solar’s (FSLR) revenue is primarily from turn-key projects, project maintenance, project sales, PV (photovoltaic) module sales to third parties, and PPAs (power purchase agreements) for sale of electricity. In this part, we’ll examine First Solar’s financial performance. As we discussed previously, First Solar has two main business segments: Components and Systems. The design, […]

India’s rising electricity demand According to the EIA’s (U.S. Energy Information Administration) 2017 International Energy Outlook, India’s electricity generation is expected to increase by 3.2% per year through 2040, to meet increasing electricity demand in rural areas. Solar outlook Even though coal is the primary fuel used for electricity generation in India, the focus on renewable […]

The Americas The US PV (photovoltaic) market made up ~83% ($2.9 billion) of First Solar’s (FSLR) revenue. The United States has typically been First Solar’s largest market, and where many of its prominent projects and customers are located. First Solar has completed the construction of Del Sur, a 26 MW (megawatt) solar project in Honduras. It commenced […]

Operating segments Previously, we looked at First Solar’s (FSLR) history. The photovoltaic module manufacturer operates two business segments: Components and Systems. The Components segment First Solar is a manufacturer of solar (TAN) photovoltaic (or PV) modules. First Solar also designs and sells these modules. They manufacture thin-film PVs, in which the semiconductor material used is […]

Green bonds are used by organizations worldwide to fund environmentally sustainable projects such as renewable energy, energy efficiency, and clean water.

SunPower expects to incur about $225 million–$275 million in restructuring charges as part of closing its Philippine-based Fab 2 manufacturing facility.

The market cheered SunPower’s restructuring initiatives. The initiatives are expected to reduce the company’s costs and improve its future margins.

Yingli (or Yingli Solar) (YGE) is set to announce its 3Q16 earnings on December 8, 2016. In this series, we’ll look at analysts’ expectations for Yingli Solar’s 3Q16 earnings.

Trina Solar’s interest expenses have consistently been on the rise over the last two years. For 3Q16, they were $28.6 million compared to $26.0 million in 2Q16.

In 3Q16, Trina Solar (TSL) reported a gross profit of $125.6 million compared to $176.3 million in 2Q16. On a YoY basis, the company’s gross profit fell nearly 9.0%.

Trina Solar (TSL) announced its 3Q16 earnings results before market hours on November 23, 2016. In this series, we’ll take a look at the results and compare them with analysts’ expectations.

Following its 3Q16 results, Canadian Solar revised down its US GAAP revenue guidance for 2016 to $2.8 billion–$2.9 billion.

On November 16, 2016, First Solar (FSLR) announced an update on its Series 6 product transition and revised its fiscal 2016 guidance.

Canadian Solar’s interest expenses fell considerably in 2Q16 to $11.9 million from $16.1 million at the end of 1Q16.

Canadian Solar (CSIQ) is set to announce its 3Q16 earnings results on November 21, 2016, before market hours.

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.

One reason that renewable energy hasn’t caught on in a big way is the cost associated with energy generation.