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SunPower Corporation's (NASDAQ:SPWR): SunPower Corporation researches, develops, manufactures, and delivers solar solutions worldwide. The US$1.0b market-cap company announced a latest loss of -US$811.1m on 30 December 2018 for its most recent financial year result. Many investors are wondering the rate at which SPWR will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for SPWR.
According to the 8 industry analysts covering SPWR, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$41m in 2021. Therefore, SPWR is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, I calculated the rate at which SPWR must grow year-on-year. It turns out an average annual growth rate of 111% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for SPWR given that this is a high-level summary, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with SPWR is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
There are key fundamentals of SPWR which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SPWR, take a look at SPWR’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should look at:
- Historical Track Record: What has SPWR's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SunPower’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.