Today's Pre-Market Trading Very Positive For SolarCity (SCTY)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified SolarCity ( SCTY) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified SolarCity as such a stock due to the following factors:

  • SCTY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $243.2 million.
  • SCTY traded 22,080 shares today in the pre-market hours as of 8:40 AM.
  • SCTY is up 2.4% today from yesterday's close.

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More details on SCTY:

SolarCity Corporation engages in the design, installation, and sale or lease of solar energy systems to residential and commercial customers, and government entities in the United States. Currently there are 3 analysts that rate SolarCity a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for SolarCity has been 4.4 million shares per day over the past 30 days. SolarCity has a market cap of $5.8 billion and is part of the technology sector and electronics industry. Shares are up 21.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SolarCity as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from the ratings report include:
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, SCTY has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • SOLARCITY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. For the next year, the market is expecting a contraction of 217.0% in earnings (-$1.78 versus -$0.56).
  • Compared to other companies in the Electrical Equipment industry and the overall market, SOLARCITY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SOLARCITY CORP is rather high; currently it is at 65.47%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.90% trails the industry average.
  • Net operating cash flow has improved to $100.01 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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