Despite Missed Estimates, Evergreen Solar's Negatives Already Priced In

From James LoGerfo, Michael Riedinger and Joe Berwind (Alternative Energy Investing): On October 2nd, Evergreen Solar (ESLR) announced that it would recognize marketing fees from its Ever-Q joint-venture in lieu of recognizing revenue based on the gross sales of modules. The company had up until this point guided analysts to expect that it would book gross sales and accept an agreed upon margin. As a result of Evergreen's changed revenue recognition policy, AEI let investors know the Street's sales estimates needed to come down dramatically. Let the cutting begin!

I/B/E/S Estimates (see below) reflect three banks that wasted no time slashing next year's numbers. Seven more cuts to go. That said, AEI thinks ESLR shares have endured the worst. We think the company's quad-furnace is a significant catalyst for the company and "others" that have a desire to access the technology. AEI is recommending subscribers begin looking at ESLR on the long side as the worst is behind it and better times lie ahead.

ESLR 1-yr chart:

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