NEW YORK (TheStreet) -- SunEdison (SUNE) stock tanked by 33.88% to $3.02 on heavy volume at the close of trading on Tuesday, after hedge fund manager David Einhorn's Greenlight Capital became the latest fund to abandon the stock.
David Einhorn's hedge fund slashed its position in the company by 25%, reducing its stake in the company to 18.2 million shares, Barron's reports.
Similarly, Dan Loeb's Third Point liquidated its position in the third quarter, Barron's reported. Glenview Capital Management sold 1.6 million of its shares to reduce its stake to 3.1%, according to the New York Times.
Additionally, Vivint Solar (VSLR) reported third quarter revenue above expectations yesterday afternoon, but earnings missed by a couple cents, Barron's notes.
In July, SunEdison said it would acquire the distributed solar energy company for $2.2 billion.
Vivint's quarterly report "severely call into question the health of the Vivint Solar organization (especially in the context of strong results from Sunrun and SolarCity)," Credit Suisse wrote, according to Barron's.
Further, this morning, Deutsche Bank lowered its price target to $16 from $28 on SunEdison stock.
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 some concerns, 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, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 8.33 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 0.76, which illustrates the inability to avoid short-term cash problems.
- Looking at the price performance of SUNE's shares over the past 12 months, there is not much good news to report: the stock is down 74.60%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- SUNEDISON INC's earnings per share declined by 19.5% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SUNEDISON INC reported poor results of -$4.12 versus -$2.39 in the prior year. This year, the market expects an improvement in earnings (-$3.59 versus -$4.12).
- 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, SUNEDISON INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income has remained constant at -$284.00 million when compared to the same quarter one year ago.
- You can view the full analysis from the report here: SUNE