3 solar stocks to sell, liquidate or avoid in the fourth quarter


The solar industry has grown amid growing attention to clean energy. However, the sector is crippled by supply chain and trade issues. Given the short-term challenges, we think it would be wise to avoid fundamentally gloomy solar stocks First Solar (FSLR), Sunrun (RUN) and Beam Global (BEEM) now. Keep reading….

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The solar industry has grown substantially over the past decade and is expected to continue growing as part of clean energy initiatives around the world. Additionally, according to the American Clean Power Association, the Inflation Reduction Act (IRA) passed in August could more than triple clean power generation, which should benefit the solar industry.

While the industry’s long-term outlook looks impressive, its near-term growth trajectory looks challenging as shipping constraints, supply chain bottlenecks and trade instability continue to limit this. industry. Since the end of 2021, more than 32.4 gigawatts of clean energy projects have been delayed, a According to a US clean energy report. Additionally, U.S. solar installations were down 53% in the second quarter compared to the same period in 2021.

In addition, rising interest rates in a context of runaway inflation is another significant headwind. Renewable energy projects tend to be sensitive to high interest rates due to the large initial costs and the lifespan of the projects.

Given the backdrop, we think it might be wise to avoid fundamentally weak solar stocks First Solar, Inc. (FSLR), Sunrun Inc. (CLASSES) and Global Beam (BEEM) now.

First Solar, Inc. (FSLR)

FSLR provides photovoltaic solar power solutions in the United States and internationally. It serves system developers and operators, utilities, independent power producers, commercial and industrial companies, and other system owners. Further, it operates in two segments, Modules and Systems.

FSLR operating result decreased 236.3% year-over-year to negative $17.96 million for the second quarter ended July 3, 2022. Net income from continuing operations decreased 147.9% from a year-over-year to negative $41.71 million, while its adjusted EBITDA declined 32.1% from the prior-year quarter to $15.20 million.

Analysts expect FSLR’s revenue to decline 10.9% year-over-year to $2.61 billion in fiscal 2022. Additionally, its EPS is expected to remain negative. during the current year.

FSLR’s forward P/E multiple of 2,028.84 is 10,113.9% above the industry average of 19.86. In terms of EV/Futures, the stock is trading at 4.68x, 87.5% higher than the industry average of 2.49x.

Over the past month, the stock has fallen 4% to close the last trading session at $129.42.

FSLR POWR Rankings reflect his poor outlook. The stock has an overall D rating, which is equivalent to a sell in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock is also rated D for growth, value and stability. It is ranked No. 8 out of 19 stocks in the F rating Solar industry.

We also rated FSLR for Momentum, Sentiment and Quality. Click here to access all FSLR ratings.

Sunrun Inc. (CLASSES)

RUN designs, develops, installs, sells, owns and services residential solar energy systems in the United States. It also sells solar energy systems and products, such as panels, racks, and generates solar leads for customers. In addition, the company provides battery and solar energy storage systems. RUN’s main customers are homeowners.

During the second quarter ended June 30, 2022, RUN’s total operating expenses increased 36.3% from the prior year value to $739.89 million. Its operating loss rose 9.5% from the year-ago quarter to $155.31 million. The company also reported a net loss of $209.76 million and a loss per share of $0.06.

Street expects RUN’s EPS to decline 194% year-over-year in fiscal 2022 to negative $0.69. The stock is down 42% over the past year and 25.6% since the start of the year.

In terms of EV/Futures, RUN is currently trading at 6.63x, 327.1% higher than the industry average of 1.55x. Its price/forwards multiple of 2.50 is 117.2% above the industry average of 1.15.

RUN’s POWR ratings are consistent with this grim outlook. The stock’s overall F rating translates to a strong sell in our proprietary rating system.

RUN has also been rated F for Stability, Value and Quality and D for Growth and Sentiment. Within the same industry, it is ranked #18.

To see the additional POWR rating for Momentum for RUN, Click here.

Overall beam (BEEM)

BEEM, a clean technology company, designs, develops, designs, manufactures and sells renewable energy powered products for outdoor advertising, energy security products and electric vehicle charging infrastructure.

For the second quarter ended June 30, 2022, BEEM’s gross loss and operating loss increased 19% and 71.4% year-over-year to $326,000 and $2.82 million dollars, respectively. The company’s net loss jumped 70.7% from a year earlier to $2.80 million, while its loss per share rose 55.6% year-over-year. other at $0.28.

The consensus EPS estimate of negative $0.24 indicates a 27.6% year-over-year decline for the quarter ended September 2022. Additionally, its EPS is expected to fall 38.9% from year-over-year to reach negative $1.03 in fiscal 2022. BEEM has missed the street EPS estimates in three of the last four quarters.

In terms of EV/Futures, BEEM is currently trading at 6.98x, 349.4% higher than the industry average of 1.55x. Its price-to-forward multiple of 7.72 is 569.3% above the industry average of 1.15.

The stock has fallen 53.9% over the past year and 13.6% over the past month.

It’s no surprise that BEEM has an overall F rating, which equates to a strong sell in our proprietary rating system.

It also has an F rating for quality and a D for growth, value, stability, and sentiment. BEEM is ranked last in the solar industry.

Click here to see additional POWR odds for Momentum.

FSLR shares were trading at $127.33 per share Monday morning, down $2.09 (-1.61%). Year-to-date, FSLR has gained 46.09%, compared to a -22.64% rise in the benchmark S&P 500 over the same period.

About the Author: Komal Bhattar

Komal’s passion for the stock market and financial analysis led her to pursue her career in investment research. Its fundamental approach to stock analysis helps investors identify the best investment opportunities.


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