Raymond James on SunPower's (SPWR) Q4: Things Aren't So Sunny Beyond the Headlines

February 8, 2013 11:43 AM EST
Get Alerts SPWR Hot Sheet
Price: $6.99 +1.75%

Rating Summary:
    14 Buy, 25 Hold, 6 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
Trade SPWR Now!
Join SI Premium – FREE
SunPower Corp (Nasdaq: SPWR) is lower Friday amid mixed fourth-quarter results and guidance issued late Thursday.

Raymond James analyst Pavel Molchanov and his team are out with comments on the quarterly numbers. The firm rates SunPower at Underperform.

Molchanov said SunPower is the most overvalued stock in the solar sector following its 49 percent run in 2013. He notes that positives like vertically-integrated operations, proprietary IP, and balance sheet support with Total (NYSE: TOT) as a partner don't mitigate the largest concern: "razor-thin margins."

SunPower's non-GAAP profit math has gotten to the point where analyst estimates are virtually "meaningless," Molchanov states. He notes that headlines EPS of 18 cents "beat" consensus views, yet nearly every other metric missed the mark. Revenue of $679 million was lower by 13 percent and core operating expenses came in 44 percent higher than Molchanov's estimate. One bright spot was gross margin at 6.9 percent, versus the firm's estimate of 3.5 percent.

Molchanov notes that EBITDA came in at negative $47 million, versus the firm's estimate of just negative $30 million.

Looking ahead, Molchanov is looking beyond the headline non-GAAP profit estimates. The firm was modeling first-quarter 2013 revs of $597 million, with SunPower guiding to a range of $450 million to $525 million. Full-year 2013 revs are expected to be flat at $2.3 billion, versus the firm's outlook of $2.8 billion. Gross margin guidance calls for three to seven percent, with the firm much higher at 9.7 percent.

Following results, Molchanov and team updated their model. FY13 GAAP loss is $1.59 per share on revs of $2.43 billion, from a loss of 72 cents per share and revs of $2.77 billion. For FY14, the firm sees a loss of 68 cents from 49 cents prior, while revs remain firm at $3.12 billion.

Shares of SunPower are down nearly 8 percent Friday.

For an analyst ratings summary and ratings history on SunPower click here. For more ratings news on SunPower click here.

Shares of SunPower closed at $8.40 yesterday.

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Analyst EPS View, Analyst PT Change

Related Entities

Raymond James, Earnings

Add Your Comment