4 solar stocks outperforming Enphase in 2021

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As the world’s leading supplier of microinverter-based solar-plus-storage systems, Enphase Energy, Inc. (ENPH) has benefited greatly from the growing solar energy market. Over the past year, the stock has climbed 497.7% to close yesterday’s trading session at $ 179.02. However, with a 12-month P / S of 32.41x (vs. the industry average of 4.20x), the stock now looks overvalued. The stock has also lost 13.4% since reaching its 52-week high of $ 222.43 on Jan.7.

Therefore, we believe it is wise to target the best performing stocks in solar space to benefit from favorable industry winds. With a dramatic drop in costs and rapid technological progress, solar power is likely to get a boost This year. Additionally, the Biden administration’s clean energy goals are expected to be a major support for the continued growth of the industry. Growing investor interest in the solar energy sector is evident in the 138.6% gains of Invesco Solar ETF (TAN) over the past six months.

SunPower Corporation (SPWR), Canadian Solar Inc. (CSIQ), ReneSola Ltd. (SOL) and Sunworks Inc. (SUNW) have outperformed ENPH so far this year, and we think there is a lot of potential.

SunPower Corporation (SPWR)

Based in San Jose, California, SPWR provides solar energy solutions around the world. The company has been ranked # 1 in Commercial Solar Power since 2017. SPWR provides solar power components, including panels and system components, primarily to dealers, system integrators and distributors. The company also offers commercial rooftop and ground-mounted solar power systems and residential mounting systems.

SPWR’s revenue increased 26.3% sequentially to $ 274.81 million for the third quarter ended September 27, 2020. Its revenue from solar energy systems, components and other segments , which accounted for 97.4% of total revenue, increased 26% sequentially to $ 267.62 million, and solar service revenue increased 50.2%. In the Residential and Light Commercial (RLC) segment, the company added 10,000 customers. Its net income increased 130.3% sequentially to $ 44.63 million.

Analysts expect SPWR’s revenue to increase 23% in 2021. The company’s EPS is expected to increase 155.6% for the quarter ending March 31, 2021 and 181% during Fiscal Year 2021. SPWR Has an Impressive History of Surprising Profits; it has beaten consensus EPS estimates in each of the past four quarters.

This week, SPWR announced plans to significantly expand its SunPower Residential Installer (SPRI) this year and plans to establish SPRI in seven new markets in six states by the end of the second quarter. In November, the company announced a takeover bid to purchase its outstanding 0.875% senior convertible debentures due this year. Over the past year, the stock has climbed 523.8% to close yesterday’s trading session at $ 52.34. It is currently trading 4.8% below its 52-week high, which it reached on January 25.

How does the SPWR compare to POWR ratings?

A for trade

A for Buy and keep note

A for peers

A for the overall POWR rating

The stock is ranked # 1 out of 17 solar industry stocks.

Canadian Solar Inc. (CSIQ)

Founded in 2001, CSIQ has grown to become one of the largest providers of solar photovoltaic products and energy solutions in the world, as well as one of the largest developers of solar power plants in the world. With active buyers in more than 150 countries, the company has shipped some 52 GW of solar modules. CSIQ operates primarily through two segments: Modules and Systems Solutions (MSS) and Energy.

CSIQ’s solar module shipments exceeded expectations for the third quarter ended September 30, 2020. Its revenue increased 20.3% year-on-year to $ 914.36 million. Its total module deliveries increased 33% year-on-year to 3,169 MW. And its gross margin increased 21.2% sequentially to $ 178.42 million, a gross margin of 19.5%. His EPS of $ 0.15 was 400% above the consensus estimate. As of September 30, 2020, the total pipeline of CSIQ projects was 16.3 GWp.

Analysts expect the company’s revenue to grow 8.5% for the quarter ended December 31, 2020, 18.1% for the quarter ending March 2021, and 43.6% in 2021. CSIQ’s EPS is expected to grow 20.4% in 2021, and at a rate of 20% per year over the next five years. The company has an impressive history of profit surprises; it has beaten consensus EPS estimates in each of the past four quarters.

CSIQ announced this month that its wholly owned subsidiary, Recurrent Energy, has completed the sale of the Slate Project to Goldman Sachs Renewable Power LLC (GSRP) of Goldman Sachs Group, Inc. (GS). The Slate Project is a 300 MWac solar and 140.25 MW / 561 MWh storage project located in Kings County, California. Also this month, CSIQ’s wholly owned subsidiary, Recurrent Energy, finalized the sale of the 144 MWac Pflugerville solar project to Duke Energy Renewables, which is a subsidiary of Duke Energy Corporation (DUK). The title has gained 15% so far this year.

The CSIQ’s POWR ratings reflect this promising outlook. It has an overall Strong Buy rating with an A for Trade Grade and Peer Grade, and a B for Buy & Hold Grade. Among solar industry stocks, it is ranked # 2.

ReneSola Ltd. (GROUND)

Founded in 2005, SOL manufactures and sells various solar energy products. The company mainly operates through three segments: solar energy project development, EPC services and power generation revenue. In addition, SOL develops and sells solar energy projects (project development activity), owns and operates solar energy projects and sells the electricity produced by its solar power plants (IPP activity).

SOL’s revenue of $ 9.75 million for the third quarter ended September 30, 2020 was at the high end of its forecast range. The company reported its second consecutive quarter of profitability with non-GAAP net income of $ 2.5 million, generating EPS of $ 0.04. As of November 30, 2020, SOL’s project portfolio was 732 MW of late stage projects, including 300 late stage projects in the US and 150 in the UK, among others.

Analysts expect the company’s revenue to increase 18.1% for the quarter ending March 31, 2021 and 126.7% in 2021. SOL’s EPS is expected to increase by 95.7 % for the quarter ended December 31, 2020, 3000% in 2021, and at a rate of 15% per annum for the next five years. The stock has gained 106.2% so far this year to close yesterday’s trading session at $ 23.57.

This month, SOL entered into securities purchase agreements with several institutional investors to sell 10,000,000 ADS at a purchase price of $ 25 per ADS in a registered direct offer. Also this month, SOL announced that it has signed a memorandum of understanding with Eiffel Investment Group to establish a joint venture that is expected to provide financing for SOL’s current and future solar projects in Europe.

It’s no surprise that SOL is rated Buy in our POWR rating system. It also has an A for Trade Grade and a B for Peer Grade. In the solar industry, it is ranked No. 5.

Sunworks Inc. (SUNW)

Based in Roseville, California, SUNW provides photovoltaic (PV) power systems for the residential, commercial and agricultural markets in California and Nevada, among other regions. The company also designs, finances, integrates, installs and manages systems ranging in size from two kilowatts for residential loads to multi-megawatt systems for larger projects. SUNW has installed more than 850 systems in California and Nevada.

The company reported revenue of $ 7.30 million for the third quarter ended September 30, 2020. Its gross profit reported $ 1.25 million. Analysts expect SUNW’s revenue to grow 10% for the quarter ending March 31, 2021 and 18.7% in 2021. The company’s EPS is expected to grow at a rate of 10% per year through over the next five years. Since the start of the year, the stock has gained 285.6%. It closed yesterday’s trading session at $ 19.74.

This month, SUNW appointed Gaylon Morris as new CEO and board member, effective immediately. The company announced in December that it had sold about 3.8 million common shares, raising gross proceeds of about $ 20 million. SUNW used a portion of the proceeds to fully repay the outstanding loan balance with CrowdOut Capital, Inc.

SUNW’s strong fundamentals are reflected in its POWR ratings. It has a buy rating with an A in the Commercial category and the Peer category. Within the solar industry, it is ranked # 7.

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SPWR stock was trading at $ 50.64 per share on Thursday morning, down $ 1.70 (-3.25%). Year-to-date, SPWR has gained 97.50%, compared to a 1.55% increase in the benchmark S&P 500 over the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in economics at university and has a passion for writing, which led to his career as a research analyst. Following…

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