The firm slashed its price target to $3 from $19 on the stock.
The more conservative stance reflects the renewable energy company's "uncertain near-term liquidity profile," given developments during the past few months, Credit Suisse wrote in a note. However, the firm doesn't expect that SunEdison will need to restructure debt or that the company faces near-term insolvency.
Just this week, SunEdison agreed to restructure its polysilicon business, and Hawaiian Electric canceled contracts for 148 megawatts of solar power from three projects from SunEdison, the firm continued.
The lost Hawaiian Electric contracts could lead to the reinstatement of as much as $215 million in debt due April 1, according to Credit Suisse.
Additionally, David Tepper's Appaloosa Management is suing to block SunEdison's TerraForm Power (TERP) yieldco from acquiring Vivint Solar (VSLR) assets, Credit Suisse notes. Latin American Power shareholders also are suing the company for $150 million, the firm points out.
"Put simply, SunEdison has tried to run too quickly - seeking hyper growth at the same time capital markets are more challenged - constraining their balance sheet," Credit Suisse contends.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
SunEdison's weaknesses include its generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: SUNE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.