Needham & Company affirms its Buy rating and $10 price target on SunEdison, Inc. (NYSE: SUNE) following recent strategic measures undertaken by the company.

Analyst Y. Edwin Mok commented: SUNE recently made several strategic moves to streamline its organizational structure and address liquidity concerns. We see the management shake-up at the board level and the yieldcos, the drop down of higher yield projects to TerraForm Global (Nasdaq: GLBL), and SUNE's pay down of the margin loan as positive signs that SUNE is responding to investor concerns regarding its liquidity and cash flow generation. The stock has rebounded 46% since last Friday's close, which we believe was largely due to short covering. As SUNE continues to improve the operation structure, we see potential for shares to move higher given the depressed levels.

On margins loans and TerraForm (Nasdaq: TERP)-triggered margins call, Mok said, Mgmt believes recent volatility of the share price is attributed to the margin loan it took out for the First Wind acquisition, which resulted in margin calls when TERP share price continues to fall. SUNE repaid $402MM in aggregate of the margin loan, leaving ~$5MM outstanding. We believe the move is prudent. Additionally, as part of the repayment of the margin loan, the market value trigger price of TERP stock was reduced and repayment provisions were waived. We believe this amendment addresses concerns over the falling TERP stock price, which could increase the risk for a margin call on SUNE.

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