The solar industry has experienced solid growth over the past decade, with a significant increase in residential solar panel installation and green energy initiatives across several sectors. However, the industry still faces serious challenges related to efficiency and reliability. For example, even with recent technological advancements, the average solar panel is only effective from 17% to 19%. In addition, the relatively high cost of solar energy remains a major constraint for the growth of the industry.
So, solar companies need to solve these problems to make their products more efficient for users.
Against this backdrop, we believe that fundamentally weak solar stocks Canadian Solar Inc. (CSIQ), Global beam (BEEM) and iSun, Inc. (ISUN), the stock of which plunged into price last week, best avoided now.
Canadian Solar Inc. (CSIQ)
CSIQ designs, develops, manufactures and sells ingots, wafers, cells, modules and other solar energy products. The company operates through two segments, Modules and Systems Solutions (MSS) and Energy. The CSIQ is headquartered in Guelph West, Canada.
On August 10, CSIQ announced its 15-year resource adequacy agreement with Pacific Gas & Electric (PG&E) to provide 150 MW / 600 MWh of energy storage in Phase 2 of the Crimson project, starting in summer 2022. However, the company is not expected to benefit from this project until the following year.
CSIQ’s operating profit declined 42% year-over-year to $ 26.38 million in its fiscal second quarter, ended June 30. Its net profit attributable to the company was $ 11.26 million, reflecting a decrease of 45.3% from the same period last year. Of the society EPS was down 47.1% from its value a year ago to $ 0.18.
A consensus estimate of revenue of $ 1.34 billion for the fiscal third quarter (ending September 2021) indicates a 46.8% year-over-year increase. However, The Street expects the company’s EPS to drop 34% from the previous year’s quarter to $ 0.10 in the current quarter.
Over the past five days, CSIQ has lost 8% to close yesterday’s trading session at $ 34.10. The share price fell 16.1% over the past week.
CSIQ has a D rating for growth, stability and sentiment in our property POWR odds system. POWR scores are calculated taking into account 118 different factors, each factor being weighted to an optimal degree. Among the 20 actions of the F-rated Solar industry, CSIQ is ranked # 2.
Click here to display additional CSIQ ratings for momentum, value, and quality.
Global beam (BEEM)
BEEM designs, manufactures and sells renewable energy products for electric vehicle (EV) charging infrastructure, outdoor media and branding and energy security products. The San Diego, California-based company primarily manufactures two product categories: EV ARC (Self-Contained Renewable Charger for Electric Vehicle) and the Solar Shaft.
BEEM’s gross loss for the second quarter, ended June 30, 2021, was $ 0.27 million, reflecting a 594.9% year-over-year increase. Its net loss increased 96.9% year-on-year to $ 1.64 million. This may be due to an increase in gross losses and an increase in operating expenses. BEEM’s net loss per share increased 12.5% year-on-year to $ 0.18.
Analysts expect BEEM’s revenue to grow 73.9 percent year-on-year to $ 10.80 million for the current year. However, the company’s EPS is expected to remain negative until at least next year. Additionally, BEEM has missed Street’s EPS estimates in three of the past four quarters.
BEEM shares fell 19.2% in the past week and 6% in the past five days to close yesterday’s trading session at $ 27.21.
The company has an overall F rating, which translates into a strong sale in our proprietary POWR rating system. The stock also has an F rating for value, stability, quality and sentiment, and a D rating for growth. It is ranked No. 19 in the Solar industry.
To see additional BEEM ratings for Momentum and other details, Click here.
iSun, Inc. (ISUN)
ISUN operates as a solar engineering, construction and supply contractor for commercial and industrial customers in the Northeastern United States. It also provides electricity subcontracting services and data and communication services. ISUN is based on min South Burlington, Vermont.
On April 14, it was reported that Purcell Julie & Lefkowitz LLP, a class action law firm dedicated to nationwide shareholder representation, was investigating a possible breach of fiduciary duty involving ISUN’s board of directors.
ISUN’s gross profit declined 14,922.5% year-over-year to $ 0.63 million in the fiscal second quarter ended June 30. This decline can be attributed to carry-over issues related to the pandemic, particularly labor shortages and industry-wide increases in materials and components. prices. In addition, its operating loss increased 168.9% from its value a year ago to $ 2.80 million, while its net loss increased 55.1% year-on-year. to reach $ 1.32 million over the period. These losses are mainly due to margin problems and an increase in its general and administrative expenses.
The Street expects ISUN revenue to grow 120.2% year-on-year to $ 46.35 million for the current year. However, the consensus negative EPS estimate of $ 0.33 for the current year indicates a 560% year-over-year decline.
ISUN stock fell 12.2% of its price in the past five days to close yesterday’s trading session at $ 7.71. The stock has fallen 22.6% in the past week.
ISUN has an overall rating of D, which is equivalent to Sell in our proprietary rating system. Additionally, ISUN has an F rating for stability and quality. It is ranked No. 14 in the Solar industry.
Beyond what we’ve stated above, we’ve also rated ISUN for Growth, Dynamics, Value, and Sentiment. Click here to view all ISUN ratings.
CSIQ shares were trading at $ 35.34 per share on Tuesday afternoon, up $ 1.24 (+ 3.64%). Year-to-date, the CSIQ is down -31.03%, compared to a 20.71% increase in the benchmark S&P 500 over the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After obtaining a master’s degree in economics, she acquired knowledge in equity research and portfolio management at Finlatics. Following…