It has been about a month since the last earnings report for SunPower (SPWR). Shares have added about 21.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SunPower due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
SunPower Q3 Loss Narrower Than Expected, View Cut
SunPower incurred third-quarter 2018 adjusted loss of 29 cents per share, narrower than the Zacks Consensus Estimate of a loss of 45 cents. However, in the year-ago period, the company delivered earnings of 21 cents per share.
Excluding one-time adjustments, the company incurred a GAAP loss of 64 cents per share, wider than the year-ago quarter’s loss of 33 cents.
During the quarter under review, SunPower reported adjusted revenues of $443.4 million, which missed the Zacks Consensus Estimate of $473 million by 6.2%. Also, the top line declined 17% from the year-ago figure of $533.6 million.
The downside in revenues was on account of delayed international projects, which resulted in lower-than-expected Performance Series (P-Series) solar panel shipments.
Total operating expenses were down 2.9% to $90 million due to lower research and development expenses as well as impairment of residential lease assets.
SunPower had cash and cash equivalents of $220.8 million as of Sep 30, 2018, compared with $435.1 million as of Dec 31, 2017.
Long-term debt was $591.4 million as of Sep 30, 2018, compared with $430.6 million as of Dec 31, 2017.
In the third quarter, net cash outflow from operating activities was $161.7 million compared with cash outflow of $26.6 million in the year-ago period.
The company expects to generate adjusted revenues of $510-$610 million in fourth-quarter 2018. Adjusted gross margin is estimated to be 6-8%. The company also anticipates deployment of 425-475 megawatts in the period.
SunPower currently projects 2018 adjusted revenues of $1.8-$1.9 billion compared with prior guided range of $1.8-$2.2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
At this time, SunPower has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SunPower has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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