Vivint closes up 7.5%; SA Pro author praises cost improvements

• Vivint (NYSE:VSLR) has cut its cost/watt from $4.25/watt in Q1 to $2.96/watt in Q4, notes SA Pro author Simple Investment Ideas in a bullish column now out of embargo. "Not only does this represent a 30% cost decline in a mere 3 quarters, but it also comes close to SolarCity's quarter 4 cost-structure of $2.86/watt."
• The author is also pleased with the strong top-line growth demonstrated by Vivint's Q4 numbers, and argues it has a "second-mover advantage" relative to SolarCity. "To be more precise, Vivint Solar has had the luxury of somewhat imitating SolarCity's business model, making cost reductions relatively easier."
• SolarCity's solar module manufacturing ambitions (could lower the company's costs) are viewed as a risk, as are potential changes in discount rate calculations for Vivint's retained value forecast. Nonetheless, the author believes both companies are "severely undervalued."
• Shares rose to $11.52 today, and are now up 35% since last Wednesday's Q4 report.

Comments

[Sermer]

Solid 4% per day upward trend line in place. Until something changes, I see no reason to sell.