Right and I even forgot EBITDA of $0 to $25 million. If you can barely turn positive EBITDA you have real issues.
Further take a look at their balance sheet. SPWR has been in business over 30 years and has accumulated $800 million in losses. FSLR on the other hand has been in business closer to 10 years and has over $3 billion in earnings.
The only reason SPWR has stayed in business so long is by selling more stock to fund the unprofitable business. Eventually this house of cards will collapse on itself. The stock price has deviated wildly from what this losing business is actually worth.
I like how they brag that they can still borrow $300 million under their revolver. Like thats something to be proud of.
Where and when are the actual earnings ever going to materialize? Please don't send me an imaginary non-GAAP number with compensation added back in.
How nice would it be if they could ever finance their business through operating profit?!?
It's hard to place a fair value on the shares since they're constantly diluting the base count. I used to think $10 was a fair price but I think it's closer to $8 now with the increased share count and poor chances of ever turning consistent profit. For SPWR to succeed and thrive they need increased selling prices. I think we all know and expect selling prices to continue to decrease especially with a bankrupt SUNE and FSLR profitably doing business at depressed pricing levels. SPWR just can't compete.
I couldn't disagree more. This is just the beginning of a monsterous and harsh correction in solar. SUNEs bankruptcy has put all these subprime solar companies and their horrid financial pictures under a microscope. FSLR will start to trend in a different direction while SPWR and SCTY go insolvent once they can't lean on their stock price to fund their operations.
Sunpower WILL eventually fold into Total. You common shareholders may get pennies on the dollar if you are lucky.
Fslr would have to double its current capacity before telluride would start to be hard to come by. Telluride is primarily a byproduct of copper refining and im sure thats not going away. Also, they dont have a free end of life recycling program cause they just feel like being good guys.
My previous answer doesnt seem to have posted.
I think this is a great question and I have given much thought to this as well. Module-only sales are generally less risky than higher margin project sales (balance sheet risk). For this reason I would expect module-only profit to trade at a higher multiple than the profit from large scale utility projects since module-only sales are less capital intensive.
In the recent past module-only sales have generally been low margin and havent contributed much (if any) to the bottom line. However, as FSLR continues to separate their technology from the pack I would expect them to be able to capture more margin on their module-only sales. Overall it may result in being net neutral or a slight positive depending on how much they can differentiate their products from the commodity players.
Its a long term loser, best left on the sidelines of your portfolio. Management uses an inflated stock price to fund their unprofitable operation. Once the stock price deflates and they can longer issue convertible debt, they're on the hook for $1.6 billion in loans with only $900M in cash. Seeing that they cant turn a profit, SPWR is a sinking ship.