Needham & Company Remains Sidelined Following SolarCity's (SCTY) Analyst Event

Needham & Company reiterated a Hold rating on SolarCity (NASDAQ: SCTY) following an analyst event in Fremont, CA. Needham came away more positive on SCTY's costs roadmap and leadership in the solar space. However, the company did not provide much detail on what SCTY's cost of capital would look like in the post-ITC rising interest rate environment, a major investor question. SCTY plans to increase its price in CA by $0.01/kWh and on a blended avg price by $0.007/kWh. Needham estimates that such a move could translate to an increase in value creation from $3.86/W to ~$4.01/W, or ~4%.

Analyst Edwin Mok commented, "SCTY hosted a well-attended Analyst Event in Fremont, CA. Walking through its value creation model, mgmt provided extensive details on cost improvements and various technologies. We came away more positive on SCTY's costs roadmap and leadership in the solar space. However, the company did not provide much detail on what SCTY's cost of capital would look like in the post-ITC rising interest rate environment, a major investor question. In the near term, news flow on regulatory changes, including net metering (such as yesterdays' CPUC proposed fee for NED) and ITC extension could drive wider swings in the stock price. Longer term, we believe investors will remain focused on growth, cash flow and value creation."

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 $40.05 yesterday.

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