SolarCity (SCTY) is 'Hot, Hot, Hot', But Questions About Financing Deal Raised
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Price: $0.01 --0%
Rating Summary:
4 Buy, 15 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 9 | Down: 16 | New: 15
Rating Summary:
4 Buy, 15 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 9 | Down: 16 | New: 15
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Up 28% today, 42% over two-days, 137% over the last month and 283% YTD, to say SolarCity Corporation (NASDAQ: SCTY) is en fuego may be an understatement.
Shares first got going on a clear fundamental recovery in solar off of extremely depressed levels. More recently, SolarCity was bought as a sympathy play off Tesla (NASDAQ: TLSA), as they share the same founder in genius Elon Musk. And just yesterday, the company signed a lease financing agreement with Goldman Sachs (NYSE: GS) to fund more than $500 million in solar power projects; an estimated 110 megawatts in generation capacity for homeowners and businesses. The financing makes it possible for homeowners, businesses, government and other non-profit organizations to install solar panels with no upfront cost and pay less for clean, solar electricity than they currently pay for utility bills.
While the financing is seen as a positive, Goldman Sachs' own analysts aren't making a big deal about it, saying it is not "new" capital.
"... the company announced it had access to 158 MW of lease financing capacity on its May 13th conference call, which was reiterated in this morning’s press release, indicating that this is not "new” capital," analyst Brian Lee said. "Rather, we believe the announcement simply provides additional granularity for investors – i.e., that of its 158 MW of total financing capacity, c.84MW (or 50%-55%) comes from this $500mn investment fund. Therefore, while providing some scope around the scale and targeting of this specific funding, we believe overall financing capacity is unchanged, and thus we see no impact to our near-term estimates for MW installations, revenue and EPS." Lee rates shares a Neutral.
Shares first got going on a clear fundamental recovery in solar off of extremely depressed levels. More recently, SolarCity was bought as a sympathy play off Tesla (NASDAQ: TLSA), as they share the same founder in genius Elon Musk. And just yesterday, the company signed a lease financing agreement with Goldman Sachs (NYSE: GS) to fund more than $500 million in solar power projects; an estimated 110 megawatts in generation capacity for homeowners and businesses. The financing makes it possible for homeowners, businesses, government and other non-profit organizations to install solar panels with no upfront cost and pay less for clean, solar electricity than they currently pay for utility bills.
While the financing is seen as a positive, Goldman Sachs' own analysts aren't making a big deal about it, saying it is not "new" capital.
"... the company announced it had access to 158 MW of lease financing capacity on its May 13th conference call, which was reiterated in this morning’s press release, indicating that this is not "new” capital," analyst Brian Lee said. "Rather, we believe the announcement simply provides additional granularity for investors – i.e., that of its 158 MW of total financing capacity, c.84MW (or 50%-55%) comes from this $500mn investment fund. Therefore, while providing some scope around the scale and targeting of this specific funding, we believe overall financing capacity is unchanged, and thus we see no impact to our near-term estimates for MW installations, revenue and EPS." Lee rates shares a Neutral.
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