It has been about a month since the last earnings report for SunPower (SPWR). Shares have added about 16% 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 catalysts.
SunPower Q3 Sales Beat Estimates, Earnings Rise Y/Y
SunPower reported third-quarter 2022 adjusted earnings of 13 cents per share. The bottom line marked an improvement from the year-ago quarter’s earnings of 12 cents per share. The Zacks Consensus Estimate for third-quarter earnings was pegged at 5 cents per share.
Including one-time adjustments, the company reported GAAP earnings of 74 cents per share against the prior-year quarter’s loss of 49 cents per share.
Operational Results
During the quarter under review, SunPower’s adjusted revenues came in at $469.8 million, while its GAAP revenues were $475.7 million. Revenues surpassed the Zacks Consensus Estimate of $429 million by 9.4%.
Moreover, the adjusted top line improved by 66.8% from the year-ago quarter’s $281.6 million.
Total operating expenses in the quarter increased 103.8% year over year to $92.9 million. Higher SG&A expenses and research and development expenses led to the upside.
Financial Position
SunPower had cash and cash equivalents of $396.5 million as of Oct 2, 2022 compared with $123.7 million as of Jan 3, 2021.
The long-term debt was $72.6 million as of Oct 2, 2022 compared with $0.4 million as of Jan 3, 2021.
2022 Outlook
For 2022, SPWR continues to expect adjusted EBITDA in the range of $90-$110 million. Meanwhile, residential customers are projected in the range of 73,000-80,000.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 10.76% due to these changes.
VGM Scores
Currently, SunPower has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. 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 B. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, SunPower has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
SunPower is part of the Zacks Solar industry. Over the past month, Enphase Energy (ENPH), a stock from the same industry, has gained 11.3%. The company reported its results for the quarter ended September 2022 more than a month ago.
Enphase Energy reported revenues of $634.71 million in the last reported quarter, representing a year-over-year change of +80.6%. EPS of $1.25 for the same period compares with $0.60 a year ago.
Enphase Energy is expected to post earnings of $1.30 per share for the current quarter, representing a year-over-year change of +78.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Enphase Energy. Also, the stock has a VGM Score of B.
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