SunPower stock tanks on 'substantial doubts' of survival
Shares of SunPower Corporation (SPWR) are falling over 35% Monday morning after a recent regulatory filing showed the company felt there was "substantial doubts" about whether or not it could continue to operate. In addition, the company breached a key term in a credit agreement that could prompt lenders to recall certain loans.
Yahoo Finance Anchors Rachelle Akuffo and Akiko Fujita break down the latest development and what it could me for the company and solar companies going forward.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
RACHELLE AKUFFO: All right, it's time for our trending ticker of the day. Shares of SunPower are tumbling after the maker of solar panels and energy storage products said there is, quote, "substantial doubt" the company can survive in a new regulatory filing. SunPower also noted it breached terms of a credit agreement over a delay in the filing of quarterly results.
You can see solar stocks are in the red today and some analyst reaction coming out of this news already. Goldman Sachs's Brian Lee downgraded SunPower from neutral to sell today and lowered its price target on the solar stock as well.
Now, you have to wonder, obviously, we've seen when it comes to solar power something of a pullback here, but I mean, year to date, clean energy stocks. It's been a bit of a mixed picture here. But some of this comes down to the business fundamentals when it comes to-- particularly to SunPower versus the broader industry trends, as we see people looking to nuclear and other ways that are perhaps cheaper or bringing more power. But interesting to see this SunPower really taking a hit here down more than 35% so far.
AKIKO FUJITA: Yeah, Rachelle, when you think about renewables, the long-term case appears to remain intact, but there's been a lot of jitters in the space in general around the huge capital costs that are involved, the investments that are necessary, and then what that means in a higher rate environment. So SunPower just the latest here getting that hit. But we saw that with, for example, Plug Power just last month when they talked about a going concern and that led to a huge drop in the stock.
As it relates to Goldman's note though, some interesting, I would say, pointers coming-- I mean, notes coming through here specifically talking about the pressure, the price pressure the company is likely to face with increased competition. Goldman's revenue estimates for SunPower, 20% less than the consensus for 2024 and then 15% less for 2025. And we should point out, their price targets at $4 a share now and we're right around that. But the stock is down, what, 77%-- well over 70% on the year, so certainly not been looking good for SunPower to say the least, Rachelle.
RACHELLE AKUFFO: Indeed, we'll continue to keep an eye on that stock for you.
