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- SunEdison's announcement of First Wind acquisition has two key components that fundamentally change its value.
- The wind portfolio not only increases short-term earnings but provides key benefits in diversification and leverage.
- The warehousing facility is likely to become a massive value driver by becoming a black hole of sorts for renewable energy projects.
- SunEdison says its acquisition of First Wind makes it the biggest renewable energy developer.
- SunEdison is in the business of buying assets and passing them on to a yieldco called Terraform.
- Terraform looks like a better investment vehicle.
Will SunEdison's Billion Dollar First Wind Bet Pay Off
- SunEdison makes a major foray into wind energy development.
- Company has been successful in the past in getting into new areas.
- Management has created value by becoming the first solar company to list a yieldco.
- Market has recognized company's effort as stock is up ~27% this year outperforming other solar stocks.
- There are positive synergies to this acquisitions.
SunEdison - Why It Is One Of The Best Positioned Solar Companies Globally
- SunEdison has a reputed brand name in the solar industry with a presence across the solar supply chain.
- SunEdison has a strong System development business and sound track record of project completion.
- Good quarterly performance and successful Terraform IPO execution.
- SunEdison has announced it filed a confidential prospectus to list a second yield co.
- This time, the new yield co will be aimed at Africa and Asia.
- This is a huge sign of confidence in the solar market future, and for SunEdison.
- The TerraForm Power IPO is immensely helpful for SunEdison in many ways.
- TerraForm Power effectively enables SunEdison to sell its projects at 60% margin.
- At $2B a year potential value add, SunEdison's market cap may multiply by 3x in the next 12 months.
- SunEdison's project backlog is growing at a robust pace on the back of projects in different countries.
- SunEdison is making smart moves by retaining projects on the balance sheet in order to increase shareholder value.
- SunEdison is tapping more markets with acquisitions and joint ventures.
- SunEdison's earnings are expected to grow at a terrific rate in the next two years.
- SunEdison is making a number of impressive moves to grow the business, a fact that reflects in its recent results.
- SunEdison's decision to retain more projects should help the company create long-term value for shareholders.
- Prospects in the solar industry are also quite bright, which means that SunEdison has strong tailwinds behind it.
- A strong pipeline and solid earnings growth projections make SunEdison a long-term buy.
- SunEdison's new spin-off, TerraForm, offers an interesting case study for the industry.
- This new business model makes perfect sense to solar companies.
- Modeling the effect of such spin-offs by other solar companies reveals serious valuation distortions.
SunEdison: Should A Long-Term Investor Consider This Company?
- SunEdison has executed well on its project pipeline and is rapidly reducing the gap with First Solar in project deployments.
- The cash flow and valuation impact of SunEdision's semiconductor will be unclear until the spin off is completed.
- To value SunEdison accurately, management needs to model and share the risks of the retained value with its investors.
- Strong execution, diversified pipeline of projects and semiconductor spin off.
- One of the world's largest solar installers and developers with great expertise and long experience.
- More value addition for investors as company retains high-yielding solar assets and raising cheap capital through yieldco.
This Solar Stock's Recent Drop Is A Buying Opportunity
- SunEdison has seen come weakness of late after it dropped a project in India due to feasibility issues.
- But SunEdison’s long-term prospects look really strong due to its robust pipeline.
- SunEdison has also collected strong financial backing to execute its projects.
- Impressive revenue growth indicates that SunEdison is on the right track.
- The continuously increasing demand should improve SunEdison's margins.
- The spin-off of the semiconductor business and strong balance sheet will prove to be important in the highly competitive solar market.
- The deal with Deutsche Bank should help the company to gain market share in the United Kingdom.
Thu, May. 8, 9:16 AM
Wed, May. 7, 11:45 AM
- A Q1 beat and full-year guidance hike aren't enough to keep First Solar (FSLR -4.2%) from selling off. Possibly contributing: In spite of the guidance hike, First Solar stated on its CC (transcript) Q2 EPS "will be significantly lower" than a $0.60 consensus due to project timings; that implies 2014 results will be very back-end loaded.
- Also: First Solar disclosed in its earnings slides (.pdf) its expected future systems/3rd-party module revenue is down $400M from the end of 2013 to $7.1B. However, expected module shipments are up by 100MW to 2.8GW, and potential booking opportunities have risen by 1.6GW to 12.2GW.
- Module production totaled 441MW, -1% Q/Q and +19% Y/Y. Conversion efficiency rose 10 bps Q/Q and 60 bps Y/Y to 13.5%, with lead-line efficiency rising 30 bps Q/Q and 120 bps Y/Y to 14.2%. The company is aiming for 18.1%-18.9% lead-line efficiency by 2017.
- Other solar stocks are also off (TAN -2.8%), as investors continue showing a take-no-prisoners attitude towards momentum stocks in general. Canadian Solar (CSIQ +0.3%) has given back the premarket gains it saw following a Q1 guidance hike.
- Notable decliners: SCTY -8.8%. SUNE -7%. TSL -5.5%. CSUN -5.1%. YGE -4.8%. SPWR -4.2%. DQ -5.7%.
Tue, Apr. 29, 3:30 PM
- Deutsche is providing SunEdison (SUNE +2.5%) with financing to build a 60MW solar plant in Kern County, CA.
- The plant, which will use 250K SunEdison solar modules, is expected to be operational by year's end. SunEdison will provide various services for it afterwards.
- Six days ago, SunEdison announced Deutsche is providing it with $103.5M in financing for two Canadian plants.
Mon, Apr. 28, 2:15 PM
- The latest rout in once-high-flying tech momentum plays isn't leaving solar stocks unscathed. The Guggenheim Solar ETF (TAN -6.2%) is now down 21% from its March 7 high of $51.07.
- Likely adding fuel to the fire: Credit Suisse has slashed its 2014 Chinese solar installation forecast by 500MW to 11.5GW, soundly below the government's 14GW target (set in February). CS thinks policy changes related to utility-scale projects, feed-in tariff reimbursement, and distributed solar incentives are needed for investment to pick up.
- The firm adds JinkoSolar (JKS -10.8%), Trina (TSL -12.2%), and Canadian Solar (CSIQ -12.8%) are well-positioned to profit from downstream projects, given they have access to financing from the China Development Bank and other sources. On the other hand, it thinks Yingli (YGE -4.1%) and ReneSola (SOL -8.8%) are "less likely to access project capital due to their strained balance sheets." Yingli recently priced a stock offering expected to yield $83M in net proceeds.
- Other decliners: FSLR -5.3%. SCTY -7.1%. SUNE -6.8%. CSUN -9.8%. JASO -9.4%. DQ -9.3%. HSOL -5.9%. SPWR -5.1%.
Tue, Apr. 22, 3:56 PM
- Solar stocks are among the biggest winners (TAN +5.2%) on a good day for momentum stocks.
- SunEdison (SUNE +11.6%) is leading the pack after David Einhorn disclosed he has added to the position he started in Q4, and predicted lower solar costs and rising electricity prices should make the company a "winner." Einhorn is less crazy about tech momentum plays in general.
- Meanwhile, Canadian Solar is benefiting from a Japanese module deal, and SunPower (SPWR +6.5%) and SolarCity (SCTY +6.4%) are getting a lift from a Goldman note calling the companies its two best solar ideas. SunPower reports on Thursday.
- Other notable gainers: YGE +7.9%. DQ +9.2%. JKS +7.4%. SOL +6.8%. HSOL +6.7%. ENPH +6.2%. JASO +4.5%.
Fri, Apr. 11, 3:20 PM
- Solar stocks are broadly lower following Yingli Green Energy's (YGE -5.1%) warning of greater than projected declines in PV module shipments in Q1.
- The first solar company to make a Q1 pre-announcement, YGE estimated Q1 shipments fell by the low 30s in percentage points from Q4, below prior company guidance of a mid-20s decrease, due to softness in China and project delays in Algeria.
- YGE reiterated its FY 2014 shipment guidance of 4.0-4.2 GW, and sees higher prices lifting Q1 margins more than expected.
- Although some of YGE's weaknesses may have been company-specific, the warning has cast a shadow over solar stocks today: SUNE -2.4%, FSLR -2.9%, TSL -2.6%, SCTY -1.7%, SPWR -5.2%, JKS -7.6%.
- ETFs: TAN, KWT
Mon, Mar. 24, 5:35 PM
Tue, Mar. 4, 1:34 PM
- With the help of positive earnings news from Trina and Yingli, volatile solar stocks are among the standouts (TAN +6%) on a very good day for equities.
- Trina posted mixed Q4 results, but also issued a strong 2014 module shipment forecast. Yingli has pre-announced its Q4 module shipments will be soundly above prior guidance.
- Notable gainers: SPWR +8.6%. JASO +8%. CSUN +6.6%. CSIQ +7.3%. STRI +10.1%. DQ +8.4%. SOL +6%.
- SunEdison (SUNE +10.5%) is taking off with the help of a Morgan Stanley upgrade. Analyst Timothy Radcliff thinks the commercial-scale solar market could grow to 129GW by 2018, with a rush of activity prior to a 2017 federal tax credit cut. He also thinks SunEdison's solar project yieldco spinoff could sport a $1.6B valuation within 12-18 months, and notes such instruments "trade at premium valuations given [their] predictable and growing cash flows."
- JinkoSolar (JKS +14.8%) is more than recouping yesterday's post-earnings losses with the help of positive commentary. Roth (Buy) notes Jinko's 2014 module guidance of 2.3GW-2.5GW beat the firm's 2.1GW estimate, and thinks Jinko is the first Chinese company to see its non-silicon processing costs drop below $0.40/watt.
Tue, Mar. 4, 9:39 AM
- SunEdison (SUNE +7.3%) has been upgraded to Overweight by Morgan Stanley. The firm is upbeat about SunEdison's addressable market for commercial-scale solar projects.
- GT Advanced (GTAT +8.4%) has been started at Buy by Goldman.
- WebMD (WBMD -3.5%) has been cut to Hold by Stifel. The firm says ad metrics are turning negative, and thinks the launch of a convertible offering following a huge buyback is a troubling sign..
- Fortinet (FTNT +1.3%) has been started at Outperform by Wedbush.
- TiVo (TIVO +1.3%) has been started at Buy by Topeka Capital.
- Constant Contact (CTCT +3.4%) has been started at Buy by Roth.
Tue, Mar. 4, 9:10 AM| 4 Comments
Wed, Feb. 19, 11:26 AM
- While revenue recognition timing led SunEdison (SUNE +0.8%) to soundly miss Q4 estimates, it also led the company to retain 127MW of solar projects on its balance sheet, above prior guidance of 100MW-110MW.
- In addition, SunEdison's solar project pipeline (much of which will presumably be attached to the yieldco spinoff) rose by 300MW Q/Q to 3.4GW. Backlog was unchanged at 1.1GW.
- Revenue was recognized on 206MW of projects, below guidance of 209MW-234MW. 504MW of projects were under construction at the end of Q4, down from 558MW at the end of Q3 (seasonality is a factor) but up from a mere 73MW a year earlier.
- The chip wafer division (also set for an IPO) had Q4 revenue of $206.7M, -10% Y/Y and near the low end of a revised guidance range of $205M-$215M. The division had a $14.7M Q4 op. loss.
- Opex (exc. one-time charges) rose 65% Y/Y to $138.4M. Free cash flow was -$46M, and capex $31.9M.
- Q1 and full-year guidance will be provided at the company's Feb. 25 Capital Markets Day.
Tue, Feb. 18, 4:03 PM
- On a good day for many tech momentum plays, solar and Chinese Internet stocks led the way.
- Solar names could be benefiting from Chinese government remarks suggesting Beijing remains open to trade talks to end its ongoing solar import dispute with the U.S. The comments come after the ITC added Chinese solar panels made with Taiwanese cells to its list of Chinese panels covered by import duties.
- Also: SunEdison (SUNE +6.6%) has filed for an IPO for its solar project business, a move that could entice other companies with major solar project ops to do the same.
- Solar gainers: FSLR +6.9%. SCTY +8%. JASO +12.6%. DQ +9.2%. CSUN +8.1%. YGE +5.5%. JKS +5.3%.
- Chinese Web gainers: CTRP +11.5%. CCIH +16.8%. RENN +11%. YOKU +6.1%. QIHU +6.9%. WUBA +10.6%. WBAI +7.9%. GOMO +9.1%. SOHU +5.6%.
- Solar ETFs: KWT, TAN
Tue, Feb. 18, 10:09 AM
- SunEdison (SUNE +3.2%) has confidentially filed an S-1 for its anticipated solar project IPO. No details have been given about the IPO's size or proposed valuation.
- SunEdison previously said it would sell a 20%-30% stake in a project subsidiary, for now referred to as yieldco, and that the offering could float in Q2 and raise up to $300M for new projects. The company also suggested yieldco would pay a dividend, and have $40M-$60M/year in distributable free cash flow.
- SunEdison has already filed for a $250M IPO for its chip wafer unit, known as SunEdison Semiconductor.
- Previous: Einhorn buys into SunEdison
Thu, Feb. 13, 3:33 PM
- SunPower (SPWR +4.8%) pushes higher, rallying from early weakness after Q4 earnings beat estimates but 2014 revenue guidance came in soft, as analysts move in to praise the company.
- The improved results were due to “solid execution, with shipment, revenue and gross margin all exceeding guidance and better than consensus,” RBC analysts say as they raise their price target on the stock to $35 from $30.
- SPWR “is well positioned for profitable growth in rooftop sales and leasing, despite the normalizing margins for new utility-scale projects in North America," Credit Suisse says.
- Other solar shares are higher too: SUNE +4.8%, SCTY +5.8%, FSLR +2.3%.
Tue, Jan. 21, 1:18 PM
- New German energy minister Sigmar Gabriel has outlined fresh solar, wind, and biogas subsidy cuts. The proposed cuts, which have already drawn criticism from politicians and the local solar industry, would come on top of 2012 cuts imposed by Europe's largest solar market.
- Citing a wish to curb electricity bill increases caused by renewable energy subsidies, Gabriel is proposing (among other things) to lower Germany's renewable feed-in tariff to €0.12/kWH from €0.17/kWh, and to limit annual solar capacity expansion to 2.5GW.
- He also proposes operators of new 500KW or larger solar plants sell their electricity directly by 2015, and to replace feed-in tariffs with a tender system by 2017. In addition, a self-consumption surcharge is proposed for certain new solar installations.
- Solar stocks are seeing some profit-taking (TAN -2.6%) following the news. Notable decliners: FSLR -2.3%. JKS -2.9%. SUNE -2.8%. DQ -3.3%. YGE -2.8%. SOL -2.6%. SOL -2.6%. TSL -1.5%. CSUN -2.1%.
Tue, Jan. 7, 1:05 PM
- Solar stocks started 2014 with a bang, and are adding to their momentum today (TAN +4%) with the help of positive industry and company-specific news.
- The Chinese government, which last year set a 35GW 2015 cumulative installation target, is now promising additional support, and says it will draft guidelines for industry M&A. Consolidation with China's fragmented solar cell/module market could both lower overcapacity (already declining thanks to rising demand) and lead to further margin expansion.
- Yingli (YGE +8.7%) and Canadian Solar (CSIQ +7.4%), both of which saw huge 2013 gains, are today's biggest gainers. Yingli has announced it's forming a JV with state-owned China National Nuclear Corp. to create 500MW of utility-scale solar projects. Canadian has announced a deal to supply 25.3MW of modules for four North Carolina projects.
- Also: Hanwha (HSOL +4.6%) has signed an MOU to supply up to 50MW of modules to U.S. residential solar installer OneRoof Energy.
- Other gainers: FSLR +2.7% (hit by a Goldman downgrade yesterday). SUNE +4.4%. DQ +4.9%. CSUN +3.2%. JASO +5.5%. ENPH +6.8%. ASTI +3.8%. JKS +3%.
SUNE vs. ETF Alternatives
SunEdison Inc is a semiconductor and solar technology company. It provides technology solutions to corporations, utilities, governments and chip manufacturers to transform lives around the world.
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