Solar organization SunEdison (SUNE) has been soaring in 2014. The stock has picked up impressively so far this year. However, SunEdison has suffered a few significant setbacks on the way.
A troublesome excursion with the right moves
First was the point at which the organization proclaimed that it is moving out of a solar energy project in India. SunEdison took such a decision because that specific project wasn't feasible any longer and would have harmed the organization's margins.
Next, when SunEdison posted its first-quarter results in May, it reported a higher-than-anticipated loss. Nonetheless, this was because the organization chose to hold a higher volume of solar plants than what it had at first arranged to deliver extra value for shareholders going ahead.
So, SunEdison has been making various right moves to develop its business, a reality that is apparent in its quarterly results. For instance, in the first quarter, SunEdison reported non-GAAP revenue of $577.6 million, up from $431.3 million in the year-prior quarter. Additionally, the organization could lessen its loss on a sequential basis, posting non-GAAP loss per share of $0.25 in the first quarter compared to loss per share of $0.48 in the previous quarter.
The street ahead
Going ahead, the organization expects its performance to enhance further on the back of its impressive strategies. SunEdison's undertaking completions are running in line with its direction metrics. It has developed its megawatts at a rate more noteworthy than 90% per year since 2009. Also, in the first quarter, it finished 150 megawatts of solar projects, in line with its target. SunEdison also secured two critical contracts in the first quarter, which will help it develop during the time and permit it to keep on maximizing value through investment projects.
Right now, SunEdison has more than 450 megawatts under construction, and it sees significant demand in the market for its projects. In addition, the organization's diversified pipeline has developed and now stands at 3.6 gigawatts, up by something like 170 megawatts from last quarter.
Going ahead, SunEdison plans to improve value per watt and increase shareholder value by maintaining certain worth projects on the asset report. Amid the first quarter, it held 74 megawatts on its monetary record, notwithstanding the 127 megawatts it held in the final quarter. By keeping the projects, SunEdison is holding more value, so it held megawatts over its direction amid the quarter. Aggregately, SunEdison has held an aggregate of 240 megawatts worth of projects.
A strong pipeline and construction movement
The organization is focusing on three business elements that will empower it to make progress: fast development, high value per watt, and a strong asset report. Amid the first quarter, it held projects so as to boost value and NPV per watt. Also, construction action for new projects stayed strong, with in excess of 460 megawatts under construction at the end of the quarter. It included 80 new projects in diverse markets, such as the U.S., Japan, the U.K., India, Latin America, and Canada, to its pipeline.
Also, SunEdison's pipeline is decently diversified, with 47% in North America, 27% in Europe and Latin America, and 26% in developing markets such as South Africa, the Middle East, and Asia. Its pipeline is also diversified by venture size. Something like 16% of its pipeline consists of projects smaller than 10 megawatts; fair sized projects between 10 megawatts-50 megawatts represent 34% of its pipeline; projects between 50 and 100 megawatts represent 28%; while products in excess of 100 megawatts were 22% of the pipeline.
Solar industry prospects will help SunEdison's development
SunEdison's efforts to amplify held worth will proceed in the second quarter as it commits more resources to building and holding its projects. This is a smart move from the organization, as the solar market is extending quickly, which may result in more value for its held projects later on as interest increases.
Subsequently, SunEdison should keep profiting from the development of the solar industry, especially because the organization is handling its exchange almost all the regions that are relied upon to report astounding development later on.
SunEdison looks truly expensive at a forward P/E of 140. Then again, investors should remember that it is a high-growth stock that is relied upon to grow at a quick rate going ahead. SunEdison's earnings are expected to grow almost 60% this year. Also, SunEdison has a PEG of just 0.08, which is again well-below the industry average of 1.48, demonstrating awesome earnings growth going ahead.
SunEdison's prospects look exceptionally strong. The company is making the right moves by holding its projects so that it can profit from the fast development that the solar industry is experiencing. Also, analysts are also truly optimistic of a firm performance by SunEdison going ahead, which is an alternate reason the stock can scale much more noteworthy heights later on.