Bull vs. Bear: What Is the Future of SunPower Corporation (SPWR)?

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Travis Hoium: The final word
It’s true that China could continue to subsidize its solar industry, and judging by the support Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) and LDK Solar Co., Ltd (NYSE:LDK) — which are both effectively insolvent — have gotten, that will be the case. But it is my belief that in the long term, the solar industry will be driven by technology, not the commoditization of modules. We’ve seen a start of that trend over the past year, with SunPower’s improving results and flat negative or low-single-digit margins in China.

As far as earnings projections go, all I know is that I’m seeing growth in the solar industry, and I think SunPower Corporation (NASDAQ:SPWR) can continue to take share and improve margins. Will the company make $1, $2, or $5 per share in 2015? I don’t know, and your guess is as good as mine.

The tough part about an investment like SunPower is we’re probably years away from a steady state in earnings, so pointing to P/E ratios and other normal valuation metrics are nearly meaningless.

It really comes down to this: If you believe that solar is the future of energy, technology and efficiency will drive the adoption of solar, and return on investment will eventually normalize and reward SunPower Corporation (NASDAQ:SPWR) for the investment it’s making, then it’s a great stock to buy. If you don’t think solar is the future then avoid SunPower. My chips are, in and I’m betting SunPower’s run has just begun.

Join the debate in the comments section below. Matt and I would love to hear what you think of SunPower Corporation (NASDAQ:SPWR)’s stock right now.

The article Bull vs. Bear: What Is the Future of SunPower? originally appeared on Fool.com.

Fool contributor Matt DiLallo has no position in any stocks mentioned. Fool contributor Travis Hoium manages an account that owns shares of SunPower, personally owns shares of SunPower, and is long January 2015 $5, $7, $15, and $25 calls on SunPower. The Motley Fool has no position in any of the stocks mentioned.

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