3 solar actions to avoid in May


The increasing number of solar installations due to new laws requiring solar power on the roofs of new homes has recently been a positive for the solar industry. In addition, a dramatic drop in the cost of solar power is contributing to the surge in sales. Solar power is expected to be the cheapest source of mass energy for years to come.

According to a forecast from the United States Energy Information Administration (EIA), 15 GW of solar photovoltaic (PV) generation capacity in the electric power sector will be added in 2021, with an additional forecast of 12 GW for 2022.

In fact, with federal grants now making solar panel installation much more affordable, and with President Biden’s plans in his $ 2 trillion infrastructure package to cut carbon emissions to zero, investors are turning to zero carbon emissions. are increasingly interested in the sector. While many companies are well positioned to capitalize on its potential, many continue to be unprofitable. So we think it’s best to avoid Sunnova Energy International Inc. (NOVA), ReneSola Ltd. (GROUND) and SolarWindow Technologies, Inc. (WNDW) because they currently have a weak financial position.

Sunnova Energy International Inc. (NOVA)

Founded in 2012, NOVA is a leading provider of residential solar and storage services in the United States. It provides maintenance, monitoring, repair and replacement, equipment upgrade, on-site power optimization, and diagnostic services. The company operates a fleet of residential solar power systems with a capacity of approximately 790 megawatts that serve approximately 107,000 customers.

In April, NOVA completed the acquisition of SunStreet Energy Group, LLC, the residential solar platform from Lennar Corporation, and became its exclusive provider of residential solar and storage services. Additionally, as part of the transaction, Lennar is committed to providing tax equity investments to support Sunnova’s pipeline of homebuilding clients. The deal is expected to help NOVA drive customer growth while growing its business.

Although NOVA’s revenue increased 38.4% year-on-year to $ 41.28 million in the first quarter ended March 31, 2021, the company recorded a net loss of $ 24.06 million. Additionally, it generated an operating loss of $ 23.31 million, which is a 63% year-over-year increase. Its EBITDA was minus $ 3.62 million over the same period.

NOVA has been unable to beat consensus EPS estimates over the past four quarters. The stock has lost 24.5% in the past three months.

NOVA POWR odds are consistent with this grim outlook. The stock has an overall F rating, which results in a strong sell in our proprietary rating system. POWR ratings assess stocks based on 118 different factors, each with its own weight.

NOVA is also rated F for value and quality. In the F-rated Solar industry, it is ranked # 20 out of 20 stocks.

To see additional POWR ratings for Growth, Momentum, Stability, and Sentiment for NOVA, Click here.

ReneSola Ltd. (GROUND)

SOL is one of the leading international manufacturers and suppliers of solar power products. The company operates through three segments: solar energy project development, EPC services and power generation revenue. It operated around 100 solar power projects with a total capacity of 173 megawatts as of December 31, 2020.

In April, SOL closed the sale of an approximately 10 MW portfolio of solar development projects to Greenbacker Renewable Energy Company in Utah. The shift from the COD (post-construction) capital efficiency strategy to more NTP (pre-construction) should allow it to focus on growing its portfolio of quality projects, while maintaining healthy profit margins. .

In the fiscal fourth quarter, ended December 31, 2020, SOL reported a 39% year-over-year decline in non-GAAP net sales to $ 16.97 million, while its segment operating profit declined 86.4% year-over-year to $ 716,000 during the same period. The Company’s non-GAAP gross margin decreased 69% from last year’s value to $ 2.62 million.

Analysts expected SOL’s EPS to drop 33.3% in the current year. Its revenue is expected to decline 11.4% to $ 23.2 million in the next quarter, ending June 2021. SOL’s stock is down 63.4% in the past three months.

SOL’s poor outlook is also apparent in its POWR assessments. The stock has an overall D rating, which is equivalent to Sell in our proprietary rating system.

The stock also has an F rating for stability and a D rating for value and quality. Click here to see additional POWR ratings for SOL (Growth, Feeling, and Momentum).

SOL is ranked # 14 in the same industry.

SolarWindow Technologies, Inc. (WNDW)

Formerly known as New Energy Technologies, Inc., WNDW is a developer of proprietary, transparent, electricity-generating coatings known as “LiquidElectricity”. The applications of LiquidElectricity coatings span a variety of industries including architecture, automotive, agrivoltaic, aerospace, commercial transportation and marine.

In March, WNDW set a record by more than doubling its previous certified performance and achieving the highest independently certified power conversion efficiency of previous organic photovoltaic devices manufactured at the Department of Energy’s National Renewable Energy Laboratory. United States under a cooperative research and development agreement (CRADA). This should help the company to dominate the market by setting a new standard for achieving energy conversion efficiency.

WNDW’s last 12-month operating loss amounted to $ 9.92 million. It generated a net loss of $ 9.83 million over the past 12 months. In addition, its EBITDA for the past 12 months was $ 9.65 million. Over the past three months, WNDW’s stock has fallen 41.8%.

WNDW’s weak fundamentals are reflected in its POWR ratings. The stock has an overall D rating, which is equivalent to Sell in our POWR rating system. WNDW has an F rating for value and a D rating for growth. Among the 20 stocks in the same industry, it is ranked No. 11.

We also rated WNDW for the momentum, stability, feeling and quality. Click here to see them.

Shares of NOVA were trading at $ 31.97 per share on Tuesday afternoon, down $ 2.83 (-8.13%). Year-to-date, NOVA is down -29.16%, compared to a 10.92% increase in the benchmark S&P 500 over the same period.

About the Author: Samiksha Agarwal

Samiksha Agarwal has always had a keen interest in the financial markets. This led her to a career as a financial journalist. With his in-depth knowledge of fundamental analysis, his goal is to help investors identify untapped investment opportunities in the stock market. Following…

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