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SunPower (SPWR) Up 25.8% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for SunPower (SPWR). Shares have added about 25.8% 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 the most recent earnings report in order to get a better handle on the important drivers.

SunPower Q4 Earnings Miss Estimates, Revenues Rise Y/Y

SunPower Corporation reported fourth-quarter 2021 adjusted loss of 7 cents per share in contrast to the Zacks Consensus Estimate of earnings of 4 cents. The bottom line also marked a deterioration from the year-ago quarter’s earnings of 14 cents.

Excluding one-time adjustments, the company reported GAAP earnings of 11 cents per share compared with the prior-year quarter’s earnings of $2.08.

For 2021, the company posted adjusted earnings of 7 cents per share, which missed the Zacks Consensus Estimate of earnings of 21 cents by 66.7%. The bottom line marked an improvement from the year-ago loss of 2 cents.

Operational Results

During the quarter under review, SunPower’s adjusted revenues came in at $384.2 million, while its GAAP revenues were $384.5 million.

Revenues surpassed the Zacks Consensus Estimate of $381 million.

Moreover, the adjusted top line improved 13.8% from the year-ago quarter’s $337.5 million.

In 2021, the company generated adjusted revenues worth $1.31 billion, up 19% from the prior year’s top line. The top line missed the Zacks Consensus Estimate of $1.32 billion.

Total operating expenses in the quarter increased 6% year over year to $82.1 million. Higher sales, general and administrative as well as research and development expenses led to the upside.

Financial Position

SunPower had cash and cash equivalents of $127.1 million as of Jan 2, 2022, compared with $232.8 million as of Jan 3, 2021.

Long-term debt was $0.4 million as of Jan 2, 2022, compared with $56.4 million as of Jan 3, 2021.

2022 Outlook

For 2022, the company expects to generate GAAP net income in the range of $85-$105 million, while residential customers are projected in the range of 73,000-80,000.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted 25% due to these changes.

VGM Scores

Currently, SunPower has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise SunPower has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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