SolarCity Corp (NASDAQ:SCTY) and Sunedison Inc (NYSE:SUNE) sunk in the market although the latter bounced back after the two alternative energy companies failed to meet Wall Street expectations on earnings. The two companies have not enjoyed the best of runs in the recent days according to Gordon Johnson, Senior Research analyst at Axiom, on suggestions that oil pricesmight have bottomed. During an interview on CNBC, Johnson, reiterated that Sunedison could spike in the market when it hosts its analyst day next week where it is expected to shed more light on its operations.
Sunedison Inc (NYSE:SUNE) rebounded in the market after dipping on posting an adjusted loss of 16 cents a share on adjusted revenues of $625.5 million. SolarCity Corp (NASDAQ:SCTY) on the other hand closed the day on the negative having posted an adjusted loss of $1.33 a share for the fourth quarter. Against analyst estimates of a loss of $1.27 a share.
“Sunedison is a well-run company, what is going to be of focus today I think is the backlog, megawatts produced, gross margins on the megawatts they actually sell, and what they do with respect to their pipeline. [..] We like this stock we’d still be long the stock into the earnings today and more importantly into the earnings next week,” said Mr. Johnson.
Sunedison according to Johnson maintains an advantage in the solar market place on the fact that it is the only solar stock on a yield co compared to the likes of SunPower Corporation (NASDAQ:SPWR) and First Solar, Inc. (NASDAQ:FSLR). Johnson does not expect the proposed Investment Tax Credit that seeks to accelerate the development of solar and other alternative energy sources to come into play anytime soon. An offering that would have had a major impact on solar stocks
The analyst remains bearish on SolarCity Corp (NASDAQ:SCTY) noting that competition could have a huge bearing on the stock going forward. Insider selling has also gone to show how the stock remains vulnerable at the back of a high Apex according to Johnson.
“My number one issue with SolarCity Corp (NASDAQ:SCTY) is competition is increasing. The way that they calculate net asset value I think is coming under scrutiny. I think there is more completion, and I think this earnings release into the winter period where you are potentially not going to have many deployments installments I think it might have some disappointments there,” said Mr. Johnson.
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