SunEdison (SUNE) Stock Closes Down as Canadian Solar Declines

NEW YORK (TheStreet) -- Shares of solar wafer manufacturer SunEdison  (SUNE) closed down 5.76% to $16.84 on Thursday as peer company Canadian Solar (CSIQ)  plummeted 8.37% to $25.73 after it announced fourth-quarter guidance on Wednesday that came up short of analysts' expectations.

Canadian Solar, a solar power systems manufacturer, said it now anticipates revenue in the range of $925 million to $975 million for the fourth quarter, less than analysts' estimates of $977.4 million.

The ongoing plunge in oil prices could also be affecting the solar energy stocks, as pricier oil could drive consumers to alternative energy sources. Crude oil prices dropped to a four year-low Thursday as indicators pointed to a continuing slowdown in China's economy.

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More than 16 million shares of SunEdison changed hands Thursday, compared to the average volume of 11,941,100.

Separately, TheStreet Ratings team rates SUNEDISON INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUNEDISON INC (SUNE) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins."

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

  • The debt-to-equity ratio is very high at 15.07 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 0.72, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SUNEDISON INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SUNEDISON INC is rather low; currently it is at 18.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.37% is significantly below that of the industry average.
  • Net operating cash flow has slightly increased to -$78.60 million or 9.02% when compared to the same quarter last year. Despite an increase in cash flow, SUNEDISON INC's average is still marginally south of the industry average growth rate of 10.84%.
  • SUNEDISON 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, SUNEDISON INC reported poor results of -$2.39 versus -$0.65 in the prior year. This year, the market expects an improvement in earnings (-$0.68 versus -$2.39).
  • You can view the full analysis from the report here: SUNE Ratings Report

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