SolarCity Corp (SCTY) Cooling Trend Today, But Still Up 300% From IPO

SolarCity Corp (SCTY) Cooling Trend Today, But Still Up 300% From IPO
By BrokenSphere (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

SolarCity Corp (NASDAQ:SCTY), which recently passed the $3 billion market capitalization mark, has been on fire since the company first went public just last December. The stock is up over 300 percent from first day trading levels, but has “cooled off” a touch having only gained a little over 125 percent since April 1.

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SolarCity Corp (SCTY) Cooling Trend Today, But Still Up 300% From IPO

The San Mateo based Elon Musk brainchild is now the second-largest U.S. solar company by market value. The company posted its earnings today following market close, and showed that it can continue its move towards profitability. (First Solar, Inc. is the largest U.S. solar company.)

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SolarCity cooling trend reflected in today’s prices

SolarCity Corp (NASDAQ:SCTY) reported a narrower-than-expected loss of $0.38 a share on revenue of $27.44 million. The consensus expected SolarCity to post a loss of $0.41 on sales of $30 million for the quarter. In only the third earnings report since going public, SolarCity improved on last quarter’s numbers, which saw the company post a loss of $0.41 a share on $30 million in revenue.

Following First Solar, Inc. (NASDAQ:FSLR)’s disappointing earnings at the end of trading yesterday, SolarCity Corp (NASDAQ:SCTY) closed the session before reporting its earnings down $1.37 from yesterday’s closed at $42.50, a drop of 3.12 percent. In after-hours trading following its earnings call, the stock has since dropped an additional $3.49 or 8.21 percent.

SolarCity has big and immediate plans to increase installations

SolarCity Corp (NASDAQ:SCTY) invested $158 million to install solar systems this quarter as demand from both homeowners and businesses for rooftop solar panels surged. In the first quarter, the company spent $138.2 million, showing that SolarCity and Elon Musk are looking to expand spending in a project that will deliver more revenue over the long term.  The company is boosting spending now to build projects that will deliver long-term revenue.

The bulk of SolarCity Corp (NASDAQ:SCTY)’s customers pay little or nothing upfront for the installations that SolarCity provides in lieu of a decade, or decades-long contracts to purchase the electricity provided by SolarCity’s panel. In January, SolarCity announced its intention to increase installations 60 percent to 250 megawatts for this year. In 2012, SolarCity’s installations accounted for 156 megawatts.

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