Sunnova downgraded by Goldman Sachs, UBS amid liquidity concerns

Investing.com -- Sunnova Energy International Inc (NYSE: NOVA) faced fresh downgrades from Goldman Sachs and UBS, as analysts cited liquidity concerns and uncertainty around refinancing upcoming debt maturities.

Goldman Sachs cut its rating to "Neutral" from "Buy" and slashed its 12-month price target to $1 from $10, given the missed financial targets, withdrawn guidance, and an ongoing concern notice.

“We believe this rating more accurately reflects the near-term uncertainty of the company as it seeks to find a resolution to its 2026 corporate debt by mid-2025,” analyst at Goldman said.

UBS also downgraded NOVA to "Neutral" from "Buy," reducing its price target to $0.65 from $5. The firm pointed to weaker-than-expected cash generation, with Sunnova reporting just $2 million in unrestricted cash for 4Q24 versus an expected $100 million. UBS warned that the going concern notice could limit the company’s ability to finance new customer origination.

“We anticipate that cash generation could be further negatively impacted by the addition of a going concern notice in the 2024 10k filing, potentially limiting NOVA's ability to finance new customer origination,” analyst at UBS said.

Both banks highlighted challenges in refinancing the company’s $975 million in corporate debt maturing in 2026, along with regulatory uncertainty surrounding federal incentives.

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