SolarCity dives post-earnings, takes peers lower with it

With shares up over 5x YTD going into the company's Q3 report, SolarCity (SCTY -14%) investors are taking profits in the face of a Q3 beat and above-consensus guidance.

Credit Suisse (Outperform, $75 PT) is defending SolarCity today, while praising the company's operating leverage and incremental retained value per watt (rose 35% Q/Q in Q3 to $1.9)1.

Goldman (Neutral, $65 PT) also talks up SolarCity's value retention, as well as its declining operational costs/watt (fell to $0.59/watt from $0.80/watt in Q2). But it also cautions expectations were high, points out "no volume upside was provided" for 2013/2014 deployment targets, and that there's "limited clarity" for SolarCity's solar lease securitization efforts.

On its CC (transcript), SolarCity mentioned it invested $200M+ in solar deployments in Q3, and financed another $86M. The company has been raising funds for its deployment efforts at a breakneck pace.

Many solar peers are also off sharply on a rough day for tech momentum play. Thanks to good earnings news, the group rallied sharply both on Monday and last Friday. In addition to SolarCity, China Sunergy's poor guidance could also be playing a role.

Solar decliners: FSLR -4.2%. SPWR -6.1%. SOL -5.1%. JKS -4.8%. YGE -4.7%. JASO -6.5%. DQ -10.2%. SPWR -6.1%. LDK -5.5%. SUNE -3.8%.

From other sites
Comments (3)
  • leebailey85
    , contributor
    Comments (86) | Send Message
    So dumb that when the ridiculous bubble of SCTY drags down the solid and ridiculously undervalued SPWR. SCTY should be $10 and SPWR should be $100
    7 Nov 2013, 04:13 PM Reply Like
  • Walter P. Chrysler
    , contributor
    Comments (300) | Send Message
    no bubble here either. move along...
    7 Nov 2013, 07:07 PM Reply Like
  • jerryf01
    , contributor
    Comments (45) | Send Message
    The thing that gets me is SCTY doesn't make any products, It sells credit and subcontracts installastions, so why compare it with integrated manufacturing co's.
    If there was ever a comparison of apples to oranges, this is number 1.
    No biggie really, the big boys like churn, fools do it for them. They get paid as long as fools trade and chase pennies.
    7 Nov 2013, 09:27 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs