The solar industry is making rapid progress with the increase in residential solar panel installation around the world as countries rush to meet their sustainability goals. However, the industry is currently crippled by supply chain bottlenecks and a series of business risks. These constraints have led to a significant increase in prices in all segments, which could hamper the growth of the industry.
Despite the bleak outlook for the industry’s growth, investor optimism about green energy initiatives around the world has driven solar stocks iSun, Inc. (ISUN) and Sunworks, Inc. (SUNW) to outperform the Broad S&P 500 Index since the start of the year.
ISUN and SUNW have gained 44.4% and 23.6% respectively, compared to 16% for the S&P 500 since the start of the year. These are the only solar stocks that have outperformed the S&P 500 and therefore might be worth adding to its watchlist now.
iSun, Inc. (ISUN)
ISUN in South Burlington, Vermont, is a solar engineering, construction and supply contractor for commercial and industrial clients in the Northeastern United States. It also provides electricity subcontracting services and data and communication services.
On September 8, ISUN signed a definitive agreement under which an ISUN subsidiary will acquire SunCommon, a leading provider of residential, community and commercial solar energy. ISUN expects the different revenue cycles of the two companies to improve its cash flow. The acquisition gives ISUN access to SunCommon’s expertise and is expected to foster its strategic expansion into the residential sector.
On August 24, ISUN announced that it had won a portfolio of five projects in the state of New Hampshire. The company estimates that the portfolio of projects will have a combined contract value of over $ 7.2 million. This reflects the company’s approach to value creation. In addition, these projects should support ISUN’s goal of doubling its revenues in 2021.
For the second quarter ended June 30, ISUN reported revenue of $ 4.35 million, an increase of 57% over the same period last year. The growth in revenues is attributable to the Company’s continued fulfillment of its backlog, which mainly consists of projects awarded in previous years. ISUN maintained a strong balance sheet with $ 20.22 million on hand at the end of the quarter.
Analysts expect ISUN’s revenue to grow 94.3% year-on-year to $ 40.91 million for the current year. In addition, the company’s revenue is expected to grow 130.1 percent year-on-year to $ 94.15 million the following year. A consensus EPS estimate of $ 0.43 for next year indicates a 155.8% increase over the current year.
ISUN shares have gained 154.9% in the past year to close yesterday’s trading session at $ 8.59.
Sunworks, Inc. (SUNW)
SUNW provides photovoltaic power systems for the agricultural, commercial, industrial, public works and residential markets. In addition, it offers its customers a range of installation services, including system engineering, procurement, grid connection, warranty, system monitoring and maintenance services. SUNW is headquartered in Roseville, California.
On August 26, SUNW announced its agreement with CBG Building Company to supply a 752.4 kW solar carport system for a housing project. In June, SUNW signed an agreement with the Colusa Unified School District near Sacramento, Calif., To provide a solar system to three schools in the district. The three systems, which provide approximately 555 kWdp of electricity in total, are valued at approximately $ 2 million. The proceeds from the deployment of its solar systems should enable the company to strengthen its financial position in the coming quarters.
SUNW’s revenue increased 231.9% year-on-year to $ 32.09 million in its fiscal second quarter ended June 30. gross profit reached $ 15.14 million, up 528.9% from the same period last year.
A consensus estimate of revenue of $ 127.40 million for the current year represents a 236% improvement over last year. Additionally, analysts expect the company’s revenue to rise to $ 139 million the following year, indicating a 9.1 percent year-over-year increase. other. The company’s EPS is expected to grow 28.6% year-over-year over the next year.
Over the past year, the stock gained 653.6% of its price to close yesterday’s trading session at $ 6.33.
SUNW shares were trading at $ 6.16 a share on Tuesday afternoon, down $ 0.17 (-2.69%). Year-to-date, SUNW has gained 20.31%, compared to a 17.05% 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…