This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Sun Isn't Setting on SunEdison

NEW YORK (TheStreet) -- SunEdison (SUNE - Get Report) is basking in the market's warm glow.

The Missouri company, whose shares are up 44% for the year to date and currently trade around $19, is a major player in semiconductor and solar technology industry, its chips business a path breaker in the design and development of silicon wafer technologies for over half a century.

With operations in the U.S., Europe, and Asia, the solar business of the company formerly known as formerly MEMC Electronic Materials produces, finances, installs and operates distributed power plants for commercial, government and utility customers.

We at The Focused Stock Trader first recommended SunEdison on June 24, 2013, at a purchase price of $8.72. Since then the company's shares have risen 113%.

Despite the stellar run in the stock, we think there is significant upside in SunEdison, as do Goldman Sachs, Deutsche Bank, Credit Suisse and Needham. All these analysts raised their target prices on the company Wednesday.
According to IHS and GTM, the solar photovoltaic (PV) market will increase its annual installations from 39 GW in 2013 to 118 GW in 2020, a 17% compound annual growth rate. SunEdison is the third-largest player in the market with 2013 solar installations at 542 MW and 2013 revenue of $2.5 billion.

SunEdison's focus on both technology, via its semiconductor business and downstream business makes it the largest player with a flexible business model able to offer multiple solutions rather than just focusing on the utility segment. Its strengths will see SunEdison's global completions double in 2014, from 542 MW in 2013 to between 900 to 1,150 MW in 2014. This growth should continue for the foreseeable future, SunEdison has a strong backlog of 3.4 GW and expects global completions to increase to over 1,500 MW in 2015 and over 2,000 MW in 2016.

SunEdison also has a large opportunity in providing electricity to rural areas. According to a recent report, the market for providing electricity to rural areas globally is around $40 billion annually. In addition, there is a $200 billion market for solar pumps for irrigating in emerging countries. There are thousands of such rural areas where efficient players in the solar space will benefit from this need. SunEdison secured the first project in India in 2010 and now operates in eight Indian states besides expanding into Thailand and Malaysia.

SunEdison has a very strong management team. In addition, with financing so important in the solar industry, the company created its own financing firm, SunEdison Capital, which created the first sale-leaseback fund and many more innovative financing solutions. 

Of the top 10 Solar PV companies, six companies are publicly traded. The average market capitalization to 2013 energy installed is almost $15 billion per GW installed. Assuming the market places half the average valuation on SunEdison, SunEdison's market cap will be $15 billion at the end of 2014. With current shares outstanding of 263 million, the target price at the end of 2014 is $31.77.  

The company is undervalued relative to peers. Regardless, assuming no multiple expansion, the stock could double over the next year.

At the time of publication the author had no position in any of the stocks mentioned. 

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Harris Shapiro is the founder of TFST Publishing LLC, the publisher of The Focused Stock Trader ( and is a contributor to TheStreet.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SUNE $0.24 -0.42%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs