SolarCity (SCTY) shares have taken an enormous beating over the past month. The wide market sell-off, coupled with investor lawsuits asserting that the company is disregarding Federal Securities laws, have prompted a massive crash in the share cost.
While this seems like an issue for SolarCity at present, investors should not overlook the way that the company plies its exchange a fast-developing solar industry. This is the reason investors should consider SolarCity's late drop as a chance to add more shares to their portfolio.
SolarCity has seen significant development in its center business as the company experienced a year over year increase of 78% in megawatt sent to 280 MW in 2013. It also posted lease revenue development of around 80% year-on-year. SolarCity has significantly enhanced its operational and capital expenditures by diminishing costs in both these segments. As a result, SolarCity almost touched its earn back the original investment point and conveyed positive net cash stream for 2013.
SolarCity's business is constantly determined by higher MW arrangement, and the company is making a decent attempt to turn profitable with its four real operational and budgetary strategies such as installing more solar roofs, decreasing completely stacked cost of installations, diminishing cost of capital, and create positive cash stream.
Going ahead, SolarCity will without a doubt profit from increased volumes in residential and commercial deployments. These deployments quickened its revenue in the final quarter. Going ahead, the company expects to convey better results in the first quarter of 2014 with extra investments made in the sending of MW in both residential and commercial segments.
Looking ahead, in the current quarter, SolarCity is hoping to convey megawatts in the scope of 78 MW to 82 MW and is certain of hitting its yearly focus of conveying 475 MW to 525 MW. Also, SolarCity is dead set to improve and influence its operations through outside investors who are wanting to fund its various renewable vitality projects. As such, SolarCity will have the capacity to use strong government assessment credits for these renewable projects.
What's more, SolarCity's number of vitality contracts has increased significantly. The company now has an aggregate of 80,000 vitality contracts worth $2 billion. With these numbers rising all the time, SolarCity looks positioned for the long run.
SolarCity has also diminished its cost of installation drastically, with various cost saving initiatives such as opening an incorporated record administration system in Las Vegas, and opening 10 new operation centers in the final quarter. The company has now increased its operation centers by half to 46.
What's more, SolarCity lessened its completely stacked cost of installation to 30%, with improvements in operational effectiveness, improvisation of processes such as equipment for both residential & commercial and offices, and economies of scale such as lessening in the cost of batteries. Besides, SolarCity has lessened its cost of capital through securitization, and at the same time, it has increased its capital resources.
SolarCity has kept on investing in innovation and services to separate itself and make a competitive edge over peers while also making a worth proposition for customers across the world. Furthermore, SolarCity as of late gained Zep Solar for $158 million, alongside immediate advertiser Paramount Energy Solutions for $120 million. These acquisitions should add diversity to SolarCity's product offering while also strengthening its promoting power.
Solar business sector prospects
Also, SolarCity is focused on matrix coordination and storage as solar's reception is continuously increasing around the world. The moves highlighted above will help SolarCity stay in front of peers and increase its piece of the overall industry. The company is aggressively investing in its sales and promoting teams to develop bookings in residential and commercial sectors.
Henceforth, SolarCity is in a solid position to capitalize on this business sector and its investments in key areas should place it in an advantageous position going ahead. SolarCity does not have a trailing or a forward P/E degree since it is still unprofitable, yet the company conveyed 101% revenue development in the previous quarter, and a PEG proportion of just 0.53 indicates stable development ahead. So, investors should consider purchasing SolarCity after its late drop.