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SolarCity Corp. (SCTY)

  • Sep. 24, 2014, 12:22 PM
    • Down AH yesterday after announcing a $500M convertible offering, SolarCity (SCTY +5.3%) is now up sharply with the help of bullish notes from Goldman and Roth.
    • Goldman has reiterated a Conviction Buy and $96 target. It's pleased with the convertible offering, as well as the closing of the Silevo acquisition and the securing of $500M+ in financing from the NY state government for SolarCity/Silevo's planned 1GW+ module plant.
    • Ground was broken in Buffalo yesterday for the plant, which is expected to go live in early 2016. SolarCity promises to invest $5B at the site (inc. payroll and opex) over the next 10 years, and to create 3K jobs. The NY government has committed $750M - $350M for building the plant, and $400M for equipment.
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  • Sep. 23, 2014, 5:50 PM
    • Continuing its financing/construction binge, SolarCity (NASDAQ:SCTY) is offering $500M worth of convertible senior notes due 2019. Initial purchasers will have a $75M overallotment option.
    • At the end of Q2, SolarCity had $577.1M in cash, $246M in regular debt, $230M in convertible notes, and $53M in solar asset-backed notes.
    • The company is relying on its breakneck capital-raising activity to hit a 2015 deployment guidance range of 900MW-1GW (up from 2014's 500MW-550MW). Eventually, it'll also need capital to build its planned 1GW+ solar module plant.
  • Sep. 23, 2014, 5:35 PM
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  • Sep. 22, 2014, 1:45 PM
    • High-beta tech stocks are selling off hard as the Nasdaq registers a 1.3% decline. The selling is broad-based, with Internet, solar, and enterprise tech stocks all well-represented among the ranks of major decliners.
    • Major Internet decliners: BIDU -4.7%. ANGI -7%. YELP -5.9%. AWAY -5.1%. CHGG -5.9%. GRUB -5.8%. P -5.2%. Z -4.6%. TRLA -4.8%. ATHM -7.9%. BITA -7%. DANG -5.9%. WB -5.3%.
    • Solar: FSLR -4.5%. SCTY -7.5%. SPWR -4.5%. DQ -7.6%. JKS -5.5%. ASTI -6.3%. ENPH -5.5%. CSIQ -4.8%.
    • Enterprise: WDAY -5.4%. GIMO -6.7%. VMEM -7.7%. IMPV -4.8%. MKTO -4.9%. SPRT -5.1%. CSOD -5.5%.
    • Others: HIMX -4.6%. SIGM -5.6%. WATT -9.7%. CYNI -5.3%. ADNC -5.7%. PXLW -5%. SWIR -5.8%. MITK -6%. OCLR -6%.
  • Sep. 4, 2014, 1:51 PM
    • Making good on an August Bloomberg report, China's National Energy Administration (NEA) has called on local governments to identify and support distributed solar projects in their realms.
    • As previously reported, extra subsidies will be encouraged for rural and government projects, public infrastructure installations will be promoted, and financial firms have been told to offer discounted loans.
    • The NEA is trying to hit an 8GW 2014 distributed solar installation target in spite of a slow start to the year. Its target for utility-scale projects stands at 6GW.
    • Several Chinese solar stocks are rallying, as are a few non-Chinese names. YGE +5.1%. CSIQ +3.6%. JASO +3.8%. TSL +2.3%. SOL +2.1%. HSOL +5.2%. DQ +4.7%. ENPH +6.6%. ASTI +6.1%. RGSE +2.8%. SolarCity (SCTY +5.1%) is up after announcing plans to open 20 new operations centers.
    • Solar ETFs: KWT, TAN
  • Sep. 4, 2014, 9:59 AM
    • Following a quarter in which it more than tripled its number of new customers compared to the same period the prior year, SolarCity (SCTY +3.9%) now plans to open 20 new operations centers across seven states.
    • The new centers are expected to create more than 600 jobs in Arizona, California, Delaware, Maryland, Massachusetts, Nevada and New York.
    • Within the last six months, SolarCity opened its first operations center in Nevada and Delaware, a second and third location in Massachusetts, a third location in Maryland and new operations centers in Hawaii and Long Island.
  • Aug. 19, 2014, 9:52 AM
    • Believing good news is priced in at current levels, Baird has downgraded SolarCity (SCTY -1%) to Neutral. Its target is still at $83.
    • Baird had only upgraded SolarCity on April 17, when shares were at $56.11. At the time, the firm called SolarCity "the stock most levered to the U.S. rooftop market, which will likely undergo a boom over the next several years."
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  • Aug. 13, 2014, 11:04 AM
    • SolarCity (SCTY +1%) is expanding its presence in Nevada through the opening of its new Henderson operations center.
    • The center will serve as the company's regional hub to install solar for Nevada residents and businesses, starting this week. SolarCity has already received more than 1,500 new customers.
    • This expansion pushes SolarCity's total Nevada staff to over 640 people.
  • Aug. 8, 2014, 4:36 PM
    • Though four firms have hiked their SolarCity (SCTY -7.3%) targets after the company posted mixed Q2 results and reiterated its deployment guidance, investors opted to take profits.
    • One possible concern: CEO Lyndon Rive mentioned on the CC (transcript) SolarCity no longer expects to be cash flow positive for 2014, as it continues ramping investments to grow its customer base.
    • "With Q2 bookings much better than expected, we expect bookings to accelerate into Q3 given the backdrop of a robust US market," says Roth's Philip Shen, hiking his PT by $18 to $98. He's also impressed with SolarCity's realized value and opex per watt, and notes it has set a 2017 installation cost target of $1.90/watt (down from Q2's $2.29/watt).
    • Goldman's Brian Lee (PT hiked by $4 to $96) notes activity outside of the "key states" of California, Hawaii, and Arizona is lifting bookings growth (+216% Y/Y), and expects "the closing of the Silevo acquisition and a potential financing deal for a N.Y.-based manufacturing facility to serve as positive catalysts."
    • Shares still +23% YTD.
  • Aug. 7, 2014, 5:02 PM
    • SolarCity (NASDAQ:SCTY) deployed 107MW of solar systems in Q2, +102% Y/Y and in-line with guidance of 105MW-110MW. 218MW of systems were booked, up sharply from Q1's 136MW. Cumulative deployments are at 756MW.
    • Deployments are expected to rise to 135MW-150MW in Q3. 2014 and 2015 deployment guidance is still at 500Mw-550MW and 900MW-1GW.
    • Q3 operating lease/incentive revenue is expected to total $50M-$55M (up from Q2's $43.2M), and EPS guidance is at -$1.10 to -$1.20 (below a -$1.00 consensus).
    • Cumulative energy contracts +28% Q/Q and +114% Y/Y to 128.9K. Cumulative customers +27% Q/Q and +102% Y/Y to 141K.
    • Estimated nominal contracted payments rose by $811M Q/Q to $3.31B. Retained value forecast rose by $513M to $1.8B; that equals $1.72/watt, up from a prior $1.56/watt.
    • Thanks to a breakneck construction pace, Q2 net cash flow was -$117.6M. SolarCity ended the quarter with $577.1M in cash, $246M in regular debt, and $230M in convertible notes, and $53M in solar asset-backed notes.
    • Shares +0.7% AH. Q2 results, PR.
  • Aug. 7, 2014, 4:17 PM
    • SolarCity (NASDAQ:SCTY): Q2 EPS of -$0.96 beats by $0.03.
    • Revenue of $61.33M (+61.6% Y/Y) misses by $1.91M.
    • Press Release
  • Aug. 7, 2014, 10:05 AM
    • SunEdison (NYSE:SUNE) recognized revenue from 54MW of solar systems in Q2, below guidance of 60MW-80MW. But it also retained 164MW on its balance sheet, better than guidance of 100MW-120MW.
    • The company now expects to finish 1GW-1.15GW of solar systems in 2014, at the high end of prior guidance of 900MW-1.15GW. Revenue is expected to be recognized from 290MW-310MW (down from 460MW-580MW), and 710MW-830MW are expected to be retained (up from 440MW-570MW).
    • In addition, SunEdison forecasts average 2014 project pricing of $2.50-$3.00/watt, better than prior guidance of $2.40-$2.75. That's providing a lift to EPS, which beat consensus by $0.40 in Q2.
    • Solar project pipeline rose by 700MW Q/Q in Q2 to 4.3GW, and backlog by 100MW to 1.1GW. 475MW of the pipeline is under construction, up from 463MW at the end of Q1 and 200MW a year ago.
    • Gross margin was 4.6% vs. 3.8% in Q1 and 5.9% a year ago. An aggressive construction pace led free cash flow to total -$80.2M. SunEdison ended Q2 with $954.7M in cash/equivalents, and $5.39B in debt. ~$3.5B of the debt is directly tied to solar systems financing.
    • Peers SunPower (SPWR +4.2%) and SolarCity (SCTY +2.8%) are also rallying. SolarCity reports after the bell.
    • Q2 results, PR
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  • Aug. 4, 2014, 7:08 AM
    • SolarCity (NASDAQ:SCTY) has appointed Brad Buss as CFO. Buss previously served as CFO at Cypress Semiconductor from August 2005 to June 2014.
    • SCTY +1% premarket
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  • Aug. 1, 2014, 12:26 PM
    • Solar stocks are underperforming (TAN -4%) amid a market selloff after SunPower (SPWR -8.5%) posted mixed Q2 results and provided Q3/2014 guidance ranges with midpoints below consensus.
    • SunPower also announced it's building a new plant (Fab 5) that could go live in 2017 and eventually produce 700MW+/year of modules, boosting its capacity by over 50%. "Our share has been in single digits for a while and demand for the last 24 months suggests that we can expand share," says CEO Tom Werner.
    • The announcement comes 6 weeks after SolarCity (SCTY -3.5%) unveiled plans to build a 1GW+ module plant with newly-acquired Silevo's help, and said it will later build "one or more significantly larger plants at an order of magnitude greater annual production capacity."
    • Minimal capacity investments, together with rising U.S./Asian demand, have helped module prices stabilize following gut-wrenching declines in prior years.
    • Also: SunPower stated on its CC (transcript) it hasn't decided whether to create a solar project YieldCo similar to SunEdison's (SUNE -4.3%) TerraForm Power (TERP -4.7%), which recently turned in a strong IPO. "It does not look like the company is likely to make a decision anytime soon," says Raymond James.
    • Nonetheless, Brean has upgraded SunPower to Buy, citing optimism about strong demand and healthy pricing.
    • Other notable decliners: FSLR -3.6%. TSL -8.4%. JKS -6%. CSIQ -5.6%. CSUN -5.7%. YGE -5%. SOL -4.5%. ENPH -5.8%. RGSE -4.5%. HSOL -3.9%. JASO -4.4%.
  • Jul. 28, 2014, 7:59 AM
    • Solar names are under pressure following the U.S. government's move to place anti-dumping duties as high as 165% percent on solar panels and cells from China.
    • China condemns the action, saying "if escalating problems in the China-U.S. solar industry are ignored, in the end it will damage up and downstream industries in both countries."
    • Moving sharply lower premarket: YGE -5.1%, CSIQ -4.3%, JKS -3.8%, TSL -2.7%, JASO -2.5%, SCTY -2.2%, HSOL -4.9%
    • Moving up: SPWR +1.8%, FSLR +2.7%.
    • ETFs: TAN, KWT
  • Jul. 14, 2014, 1:38 PM
    • WTO judges have ruled the U.S. imposition of tariffs on Chinese solar modules, steel products, and other exports violates global trade rules.
    • Though rejecting some Chinese arguments against U.S. tariffs, the judges ultimately ruled the tariffs are inconsistent with obligations under the 1994 Marrakesh accord.
    • The U.S. originally imposed tariffs on Chinese solar module exports in 2012, and followed up last month by slapping new preliminary tariffs meant to close a loophole related to the use of non-Chinese cells.
    • Chinese solar stocks are rallying on an up day for equities: YGE +4.8%. SOL +3.1%. CSUN +5.5%. TSL +2.6%. JKS +2.8%.
    • SolarCity (SCTY +2.4%), which relies heavily on Chinese module imports (that might change in a few years), is also higher.
    • Solar ETFs: KWT, TAN.
SCTY vs. ETF Alternatives
Company Description
SolarCity Corp is engaged in designing, sales, engineering, installation, monitoring, maintenance and financing of solar energy systems to residential and commercial customers, and sale of electricity generated by solar energy systems to customers.