SunPower Corp. (NASDAQ:SPWR) used to design, manufacture, market, and install solar panels until it decided to split into two publicly traded companies in November 2019. The decision separated its solar panel manufacturing business from storage and energy services operations. The new solar panel firm was named Maxeon Solar Technologies (MAXN), while the existing company retained the SunPower name. Since then, SunPower has been completely dependent on the residential and commercial rooftop solar installations business.
The move helped SunPower to simplify its organizational structure, improve its overall efficiency, and reduce costs. However, SPWR shares traded nearly flat during the first half of 2020, as its solar installation operations experienced a setback due to the pandemic. Nevertheless, the roll-out of a successful vaccine against the Covid-19 and increasing demand for renewable energy sources is expected to have a positive impact on SPWR stock in the coming quarters.
Around 2 percent of households in the U.S. currently use solar power to light up their homes. Solar capacity is anticipated to increase by three folds in the new home market by 2025. Hence, there is a massive opportunity for SunPower in the U.S. market. The company is already working with most of the leading builders in the country for solar panels deployment.
SunPower shares have been on an upward trajectory over the past six months, climbing nearly 470 percent during the period. The stock has soared more than 20 percent in the mid-day trading Wednesday on heavy volume. Yesterday’s surge came as Democrats get closer to taking charge of the U.S. government and Senate. Democrats have already outlined their plan for passing more green energy bills and pursuing environment-friendly policies.
Moreover, Goldman Sachs recently lifted its price target for SPWR stock from $23 per share to $33 per share, another reason behind the latest stock rally.