SolarCity Corp Losing Share In An Important Market

SolarCity Corp Losing Share In An Important Market
By BrokenSphere (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

Demand for SolarCity products is declining at a faster pace in California’s rooftop solar market, stated analyst Gordon Johnson at Axiom Capital, who cites recent data. The solar firm is losing share in California’s rooftop market, and its growth is slowing down, according to the analyst.

Grim rooftop data from California

For the month of April, new rooftop applications in California declined 20% on a month-over-month basis and was lower by around 29.88% on a year-over-year basis, according to the recent data. Gordon notes that this is the lowest level seen since April 2014. Also the analyst notes that in nine out of the last 13 months, growth in new photovoltaic (PV) applications in California declined, and the decline in April was for the second consecutive month.

Gordon has a Sell rating on the stock with a price target of $7. The average price target among analysts who cover the stock is $29.47. The most bearish and bullish PT estimates are $7 and $50, respectively. Ten out of 18 analysts who are covering the stock have rated it as Hold, and four have rated it as a Strong Buy. One analyst has rated the stock at Underperform, and three analysts have presented a Buy rating for the stock.

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SolarCity poised for growth

SolarCity’s stock performance has been poor year-to-date. The stock value represents investors’ reduced confidence in the solar company and its performance. However, the fall in the stock price can prove to be an influential point for investors, as the stock appears to be available at a highly discounted price. Any kind of investment spree in the solar company can start a positive rally and boost the value of its stock.

Ben Kello and Tyler Frank of Baird recently stated that the regulatory issues surrounding the company are just hype because in the majority of the net metering cases, support is there for solar. But these concerns have pulled the company’s shares down significantly. The analysts note that the proposal from the Solar Progress Partnership in New York lays the foundation for the long-term growth of solar there. Overall, the analysts believe SolarCity is poised well for growth on the back of capital market access, falling costs and the ITC extension.

At 9:52 a.m. Eastern, SolarCity shares were up 2.58% at $21.05. Year to date, the stock is down almost 59%, while in the last year, it is down almost 62%. The stock has a 52-week high of $61.72 and a 52-week low of $16.31.

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