Needham & Company Downgrades SolarCity (SCTY) to Hold

March 7, 2013 7:20 AM EST
Get Alerts SCTY Hot Sheet
Price: $20.34 --0%

Rating Summary:
    4 Buy, 16 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Needham & Company downgraded SolarCity (NASDAQ: SCTY) from Buy to Hold following Q4 results, saying less upside to deployment growth target will limit share price gains.

The analyst comments, "We are downgrading SCTY from Buy to Hold as we believe a lack of upside to its deployment target will prevent the stock from moving higher. To be clear, our rating change has little to do with the 4Q12 GAAP financials falling short of Street estimates. With the market conditions continuing to support strong growth of solar leasing and SCTY’s track record, we continue to believe SCTY will deliver strong Y/Y deployment growth and we expect 2013 deployment to meet the target of 250MW. However, we see less upside to deployment growth, which we think was priced into the stock, and even after the pullback in after-hours trading the stock remains within 10% of our updated valuation target of ~$18 (our PT was $17). Therefore, we believe a Hold rating is more appropriate at this time. We would look for signs of stronger deployment growth or a more meaningful pullback of share price before turning more aggressive on the stock."

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

Shares of SolarCity closed at $19.27 yesterday.

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