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SolarCity falls on bigger-than-expected 1Q loss

NEW YORK (AP) -- Shares of SolarCity fell Tuesday after it posted a bigger-than-expected first-quarter loss.

THE SPARK: On Monday SolarCity Corp. reported a loss of $28.2 million, or 41 cents per share, on revenue of $30 million. Analysts polled by Factset expected a loss of 39 cents per share on revenue of $29.2 million.

THE BIG PICTURE: SolarCity, based in San Mateo, Calif., leases and installs solar energy systems for homes and businesses. The company went public in December. In the months since, the shares have more than quadrupled their initial public offering price of $8 and hit a new high of $39 on Monday.

THE ANALYSIS: Philip Shen of Roth Capital Partners said in a client note that SolarCity "has built a best-in-class operation and is pioneering a better way of delivering energy." But the analyst is concerned about the aggressive run-up in the stock, saying the share price "feels stretched."

Shen lowered SolarCity to "Neutral" from "Buy" and set a $30 price target.

Raymond James analyst Pavel Molchanov said that the quarterly performance was likely not what the market was hoping for, but noted that SolarCity is one of very few public companies that gives investors access to the fast-growing U.S. photovoltaic market. The analyst reaffirmed a "Market Perform" rating.

SolarCity said in a statement that the demand for cheaper, cleaner energy has allowed it to double its customer base year-over-year and beat its forecast on megawatts deployed.

"We're focused on growth in the short term, which in turn creates long-term value for our shareholders," the company said.

SHARE ACTION: The stock dropped $2.86, or 8 percent, to $33.02 in afternoon trading. SolarCity's shares have traded between $9.20 and $39 since going public.