In this article, we discuss the 5 cheap solar stocks to buy. If you want to read the renewable and solar industry analysis, go directly to 10 Cheap Solar Stocks To Buy.
5. Sunnova Energy International Inc. (NYSE:NOVA)
Number of Hedge Fund Holders: 25
Sunnova Energy International Inc. (NYSE:NOVA) is a Texas-based renewable energy company. Its products include solar power systems, battery energy storage systems, EV chargers, and generators. As of December 19, Sunnova Energy International Inc. (NYSE:NOVA) is a cheap solar stock that is trading at a PE ratio of 19.02, the lowest since June 2019.
On December 15, Citi analyst Ryan Levine assumed coverage of Sunnova Energy International Inc. (NYSE:NOVA) with a Buy rating and a $26 price target. According to the analyst, the company is well-positioned to take advantage of rising utility bills and the Inflation Reduction Act. In addition, Sunnova Energy International Inc. (NYSE:NOVA)’s risk/reward tradeoff seems positive.
Sunnova Energy International Inc. (NYSE:NOVA)’s hedge fund sentiment remained the same during the third and fourth quarters. However, hedge funds seem to be bullish on the stock as they added substantial additional holdings to their portfolio. In the third quarter, 25 hedge funds had a stake worth $294.403 million, compared to a combined stake of $171 million in the second quarter. Moore Global Investments increased its holdings in the stock by 140% in the third quarter and was the largest stakeholder in the company with 2.7 million shares, worth $60.538 million.
Here is what ClearBridge Investments had to say about Sunnova Energy International Inc. (NYSE:NOVA) in its Q3 2022 investor letter:
“Within the utilities sector, solar power and energy storage company Sunnova (NYSE:NOVA) saw its share price benefit from passage of the Inflation Reduction Act legislation, which includes an array of new and extended tax credits that should not only support but enhance the company’s long-term growth prospects.”
4. Array Technologies, Inc. (NASDAQ:ARRY)
Number of Hedge Fund Holders: 29
Array Technologies, Inc. (NASDAQ:ARRY) is an American company that provides solar tracking systems. Its products can track the ideal positions for solar panel systems to achieve maximum production. As of December 19, the company is trading significantly below its IPO price and has shown growth at a considerable pace in recent quarters, and made it to the top 4 in our list of cheap solar stocks.
Array Technologies, Inc. (NASDAQ:ARRY) outperformed its Q3 EPS estimates by 8 cents and reported a non-GAAP net income per share of 18 cents. The company generated a revenue of $515 million in the quarter, showing a 173% increase from Q3 2021. Moreover, Array Technologies, Inc. (NASDAQ:ARRY) management raised its FY 2022 outlook to the range of $1.5 billion to $1.6 billion, compared to the previous $1.3 to $1.5 billion.
Wells Fargo analyst Michael Blum initiated Array Technologies, Inc. (NASDAQ:ARRY)’s coverage on December 6 with an Overweight rating. The analyst’s price target was $26 and he noted that he expects a revenue CAGR of 10% due to the government policies in favor of net-zero targets.
3. Altus Power, Inc. (NYSE:AMPS)
Number of Hedge Fund Holders: 33
Altus Power, Inc. (NYSE:AMPS) is an American renewable energy products manufacturing company that includes photovoltaic solar energy generation and storage systems. The company experienced a recent sell-off in the market and has lost 38.48% of its stock price year-to-date. Altus Power, Inc. (NYSE:AMPS) has a TTM PE ratio of 12.42.
On November 14, JPMorgan analyst Mark Strouse upgraded Altus Power, Inc. (NYSE:AMPS)’s stock to Outperform from Neutral. However, the analyst’s price target remained unchanged at $10. In the last three months, the company has been covered by 5 analysts and 4 of them have a Buy or Outperform rating on the stock. Their average price target of $11.80 represents an approximately 80% upside for Altus Power, Inc. (NYSE:AMPS) at the time of writing on December 19.
In the third quarter, Altus Power, Inc. (NYSE:AMPS)’s hedge fund sentiment shot up substantially with 33 hedge funds taking a piece of the company’s total shares. In the previous quarter, 21 hedge funds had a stake in the company.
2. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 45
First Solar, Inc. (NASDAQ:FSLR) manufactures solar panels and provides solar farms. It is headquartered in Arizona. Furthermore, the company also provides maintenance and end-of-life- recycling services. As of December 19, the First Solar, Inc. (NASDAQ:FSLR) stock is trading at 49.61% below its all-time high.
First Solar, Inc. (NASDAQ:FSLR) is already up 76.98% year-to-date at the time of writing, yet Wall Street analysts remain bullish on the stock. Out of 18 analysts that have covered the stock, 12 analysts maintain a Buy or Overweight rating on First Solar, Inc. (NASDAQ:FSLR), while the rest of the 6 have a Hold rating. Their average price target of $174.80, represents approximately a 12% upside to the stock price of $156.77 on December 19.
First Solar, Inc. (NASDAQ:FSLR) became quite a famous stock among hedge funds in the third quarter of 2022. 45 hedge funds were bullish on the company in the September quarter and owned a combined stake of $703.697 million, compared to 26 hedge funds with a combined value of $189.14 million in Q2.
1. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 47
Sunrun Inc. (NASDAQ:RUN) is a California-based renewable energy company that makes it to the top of our list of cheap solar stocks. It offers solar power systems and battery energy storage products. The company serves approximately 760,000 customers across the United States.
Sunrun Inc. (NASDAQ:RUN) is trading at $27.22 as of December 19, which is almost 72% below its all-time high. However, the company has been growing at a significant pace over the years and still has room for growth. In Q3, the company outperformed its GAAP EPS estimates by $1.01 while the analysts were predicting a net loss of 5 cents per share. The revenue grew 44% year-over-year to $631.91 million. Moreover, the Net Subscriber Value reached $13,259 which is 67.62% over the previous quarter. In addition, Sunrun Inc. (NASDAQ:RUN)’s management expects the solar energy installed growth to be 25% more than 2021 levels.
In the last three months, Sunrun Inc. (NASDAQ:RUN) was covered by 15 analysts with 13 Buy or Overweight ratings. Their average price target of $47.87 represents an upside of 76% from the stock price as of December 19 market closing time.
In Q3, Orbis Investment Management was the most significant shareholder of Sunrun Inc. (NASDAQ:RUN) with 12.2 million shares, worth over $337 million.
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