Long-established in the Semiconductors industry, SunPower Corp (SPWR, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a decline of 4.98%, juxtaposed with a three-month change of -39.52%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of SunPower Corp.
Deciphering the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 1. Financial strength rank: 4/10
- 2. Profitability rank: 4/10
- 3. Growth rank: 3/10
- 4. GF Value rank: 2/10
- 5. Momentum rank: 2/10
Based on the above method, GuruFocus assigned SunPower Corp the GF Score of 54 out of 100, which signals poor future outperformance potential.
Understanding SunPower Corp's Business
SunPower Corp, with a market cap of $1.17 billion, is a leading solar technology and energy services provider. It offers fully integrated solar, storage, and home energy solutions to customers primarily in the United States and Canada through an array of hardware, software, and financing options and smart energy solutions. The company's sales channels include a network of both installing and noninstalling dealers and resellers that operate in residential and commercial markets as well as a group of in-house sales teams in each segment engaged in direct sales to end customers. Despite its extensive operations, the company has an operating margin of -1.64% and sales of $1.88 billion.
Financial Strength Breakdown
SunPower Corp's financial strength indicators present some concerning insights about the company's balance sheet health. The company's interest coverage ratio of 0 positions it worse than 0% of 633 companies in the Semiconductors industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. The company's Altman Z-Scoreis just 0.46, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.28 indicates a struggle in handling existing debt levels.
Profitability Breakdown
SunPower Corp's low Profitability rank can also raise warning signals.
Growth Prospects
A lack of significant growth is another area where SunPower Corp seems to falter, as evidenced by the company's low Growth rank. Lastly, SunPower Corp predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Next Steps
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. It's crucial for investors to consider these factors when making investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
