These Solar Stocks are Dipping on Monday

NEW YORK (TheStreet) -- Sunedison (SUNE), SunPower Corporation (SPWR) and First Solar (FSLR) are trading lower Monday morning. By late morning, Sunedison had shed 2.7% to $13.55, SunPower was 5.3% lower $30.65, and First Solar dropped 4.6% to $48.27.

Year to date, Sunedison has climbed 3.8%, and SunPower is up 1.9%.

First Solar has dropped 11.4% since January after Goldman Sachs analyst Brian Lee downgraded the stock to "sell" earlier in the month. The analyst predicted the solar panel maker will see a decline in earnings in the near future.

TheStreet Ratings team rates SUNEDISON INC as a Hold with a ratings score of C-. The team has this to say about their recommendation:

"We rate SUNEDISON INC (SUNE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SUNE's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, SUNE's share price has jumped by 251.99%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • SUNEDISON INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SUNEDISON INC continued to lose money by earning -$0.65 versus -$6.66 in the prior year. This year, the market expects an improvement in earnings (-$0.15 versus -$0.65).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 405.8% when compared to the same quarter one year ago, falling from $36.10 million to -$110.40 million.
  • The debt-to-equity ratio is very high at 6.40 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SUNE maintains a poor quick ratio of 0.71, which illustrates the inability to avoid short-term cash problems.

TheStreet Ratings team rates SUNPOWER CORP as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate SUNPOWER CORP (SPWR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 278.04% and other important driving factors, this stock has surged by 321.14% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • SUNPOWER CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SUNPOWER CORP continued to lose money by earning -$3.01 versus -$6.14 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus -$3.01).
  • SPWR's debt-to-equity ratio of 0.89 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.98 is weak.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SUNPOWER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SUNPOWER CORP is currently lower than what is desirable, coming in at 25.26%. Regardless of SPWR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.49% trails the industry average.

TheStreet Ratings team rates FIRST SOLAR INC as a Hold with a ratings score of C+. The team has this to say about their recommendation:

"We rate FIRST SOLAR INC (FSLR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FSLR's very impressive revenue growth greatly exceeded the industry average of 4.4%. Since the same quarter one year prior, revenues leaped by 50.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FSLR's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.29, which illustrates the ability to avoid short-term cash problems.
  • FIRST SOLAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FIRST SOLAR INC reported poor results of -$1.19 versus -$0.50 in the prior year. This year, the market expects an improvement in earnings ($4.38 versus -$1.19).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, FIRST SOLAR INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for FIRST SOLAR INC is currently lower than what is desirable, coming in at 33.26%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 15.41% trails that of the industry average.

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