Seeking Alpha

SolarCity affirms 2014 guidance, details spending activity

  • Thanks to sizable increases in both sales/marketing and G&A spend, SolarCity's (SCTY) opex rose 73% Y/Y in Q4 to $65.2M. $234.9M was spent on investing activities, +64% Y/Y, and operating cash flow fell to $13.9M from $57M.
  • $262.4M was raised via financing activities, and $402.7M via equity/convertible note offerings.
  • The company expects Q1 GAAP operating lease/solar incentive revenue of $27M-$29M, and solar system sale revenue of $23M-$27M; the Q1 revenue consensus is at $45.2M. EPS is expected to be in a range of -$0.70 to -$0.80, below a -$0.50 consensus.
  • SolarCity ended 2013 with $577M in cash/equivalents, $1.68B worth of leased/to be leased solar systems (+71% Y/Y), $246M in long-term debt, $53M worth of solar asset-backed notes, and $230M worth of convertible senior notes.
  • Inventories stood at $111.4M, and the deferred revenue balance at $470.1M (up from $379.8M at the end of Q3).
  • Shares -1% AH. Q4 results, PR
  • Previous: SolarCity's Q4 deployment/booking figures
Comments (15)
  • Camper
    , contributor
    Comments (161) | Send Message
     
    Very nice. All the handwringing over the brief report delay seems to have been for nought.

     

    Incidentally, utilities are running scared. Their latest attempt to tax or prohibit non-utility solar lessors just went down in flames in Washington State.
    18 Mar, 04:58 PM Reply Like
  • tombland
    , contributor
    Comments (117) | Send Message
     
    Do you have a link for that story Camper?
    18 Mar, 05:11 PM Reply Like
  • CDM Capital
    , contributor
    Comments (428) | Send Message
     
    Q4 2013 gross margins at 21%, 4th sequential decline. From Q4 2012, 55%, 42%, 40%, 36%, and now 21%... Huge disconnect b/w the enormous multiples on the stock and the actual business performance. Sale growth is slowing significantly, likely competitive pressures impacting gross margins, no barriers to entry, and end users getting more optionality with residential solar loans. At the low end of sales guidance for Q1 14' sales only growing sequentially at ~5%
    18 Mar, 05:04 PM Reply Like
  • aow
    , contributor
    Comments (123) | Send Message
     
    Ya that guidance.... not too happy about that. No position, like the business model, not the valuation.
    18 Mar, 05:55 PM Reply Like
  • cmnsnse
    , contributor
    Comments (466) | Send Message
     
    U.S. homeowners installed 792MWs of solar power last year (up 60% over 2012) Solarcity installed 280MWs of that... that's 35.4% of all installations... with 20% of all installations in Q1 2013 to now 35.4% after Q4(more than the next 11 competitors combined), you have to admit, even in your pessimist view, that's impressive market share growth trend...
    18 Mar, 06:40 PM Reply Like
  • cmnsnse
    , contributor
    Comments (466) | Send Message
     
    Again take a look below the surface of Solarcity... Have to consider their relationship to tesla motors and spacex in terms of product innovation... All three companies work with each other, multiple r&d synergies and top of the field expertise, a patent portfolio that rivals any in the world. Think about it for a second. What other solar industry company has such a "Menlo park" /bell laboratory" toolbox of growth drivers at their finger tips like this? I mean, spacex is about to launch the first reusable rocket in history, tesla developed the most efficient electric car and recharging network the world has seen, and Solarcity has installed more residential MWs in one year then in all of history... Hard pressed not to see this trio leading long term secular change regardless of general world market performance... Best strategy in this case is opportunistic accumulation.
    19 Mar, 01:59 PM Reply Like
  • BigVolt
    , contributor
    Comments (23) | Send Message
     
    Yes, when you sell at a loss, you gain market share!
    19 Mar, 04:48 PM Reply Like
  • jawdoc19@gmail.com
    , contributor
    Comments (36) | Send Message
     
    Goldman will repeat conviction buy tomorrow and $SCTY will move back to 80.
    18 Mar, 05:17 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3311) | Send Message
     
    Somebody needs to be convicted indeed.
    18 Mar, 08:47 PM Reply Like
  • cmnsnse
    , contributor
    Comments (466) | Send Message
     
    It's funny how the ITC expiring in 2017 keeps coming up as the limit on growth, Solarcity expects to have 1mln customers, and $500mln in free cash flow annually by summer 2018... a year and half after the expiration... doesn't seem to me Solarcity sees growth slowing down at all. Tesla energy storage is happening, folks. Solarcity's international expansion is happening next year. Japan is very much interested in accelerating it's energy storage adaption and I guess Zep(Solarcity company) has a great foothold there currently... just saying watch out for the random bear traps coming down the pike....
    18 Mar, 07:04 PM Reply Like
  • cmnsnse
    , contributor
    Comments (466) | Send Message
     
    Just did a review... Solarcity had 30,950 customers at the end of 2012, a 243% increase over prior year. They just hit 100,000 customers, which is a 323% increase since the beginning of 2013... At this rate they will hit their 1mln customer goal, conservatively, by mid 2016... Potentially two years ahead of schedule... Potential number by mid 2018 could be well over 3 million... at these numbers, makes me wonder if Solarcity is sandbagging current long term guidance. I wonder at 3 million customers in 2018, how many GWs of capacity installed? 18GWs? If Solarcity projects $500mln in free cash flow from 6GWs, then it might be $1.5bln free cash flow (cash after op expense/capex) at 18GWs capacity.... Where does this put the current stock price multiple?
    19 Mar, 02:55 PM Reply Like
  • cmnsnse
    , contributor
    Comments (466) | Send Message
     
    Too add, Solarcity averages 40% of all its installations to happen in Q4. That means potentially 210MWs(high end) in Q4... 75% of all 2013 installs in just one quarter... Huge numbers... For 2014 in total, 383MWs will be just residential alone... Since much of the capital raise in 2014 will be from asset backed securities as opposed to tax equity, will also see greater increase in retained value going into 2015.
    19 Mar, 06:04 PM Reply Like
  • niboryak
    , contributor
    Comments (109) | Send Message
     
    ****''cmnsnse;'' Everything you say DOES make common sense. I'm not long but looking to be. I can only think that too much was already baked into the stock price.?? Maybe $60-65 for an entry ?? In the meantime, Goldman AND JP Morgan just added themselves to the ''strong-buy-list'' on my CSIQ so i'm not in such a hurry to leave it just yet. I imagine they've got plans for it maybe starting with a FSLR type of short squeeze as there's now a lot more shorts since CSIQ's last earnings day a week or so ago.
    20 Mar, 07:11 PM Reply Like
  • cmnsnse
    , contributor
    Comments (466) | Send Message
     
    Just added today at 66.65, 67.12, 66.06... Opportunistic accumulation.

     

    Some people short, some people go long, all is well. SCTY is a mega long for me. I will accumulate for years to come. I started IPO day (12.03) and haven't looked back.

     

    Just examine what's coming down the line the rest of the year, and I think you'd be front loading accumulation like I am... The $100mln ABS at the end of March/beginning of April should be the start of the true next leg up...
    21 Mar, 05:55 PM Reply Like
  • cmnsnse
    , contributor
    Comments (466) | Send Message
     
    There are thousands of Solarcity customers waiting for energy storage right now. When the CPUC resolution comes soon, the orders in California will be filled and Solarcity PV+storage will accelerate, even then Solarcity won't be able to catch up to demand until giga factory starts up. Solarcity/tesla is (will be) the only game in town with low cost, zero emissions, battery storage for utility/commercial/res... application, so don't see demand being a problem no matter how long it takes for regulation to catch up (which in California there is tremendous state mandate pressures to get going very soon).

     

    Now look at the competition. Who has PV+energy storage that can compete and is compelling to a potential residential customer? Sunpower? First solar? SunEdison?
    I don't see anyone even close. So, it really won't matter if the competition use different financing models to appeal to consumers right now, in the long run, the vast majority will look toward solarcity's offer of PV+storage lease as the most attractive. Gotta look forward a little to see where this industry is going and who is ready to go there... Solarcity is by far the leader
    24 Mar, 02:41 PM Reply Like
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