According to IEA Global Energy Review, renewables were the only energy source that reported growth in demand this year, driven by larger installed capacity and priority dispatch, and supportive government policies. EIA expects the US power sector to add 7.9 GW of new wind capacity in 2021 and the utility-scale solar capacity to rise by 13.0 GW in 2021.
The policies and economic stimulus measures expected from the upcoming Biden-Harris administration would likely be focused on clean energy. Biden had previously announced a proposal to spend $2 trillion on clean energy and plans to add more than 500 million solar panels to America’s energy infrastructure over the next five years.
As more nations are adopting aggressive policies to eliminate carbon emissions over the next couple of decades, investment in clean energy stocks like NIO Limited (NIO), First Solar, Inc. (FSLR), Canadian Solar Inc. (CSIQ), and Renewable Energy Group, Inc. (REGI) can be rewarding.
NIO Limited (NIO)
NIO is a designer, manufacturer, and seller of electric vehicles offering five, six, and seven-seater electric SUVs worldwide. The company also manufactures e-powertrains, battery packs, and various other components and offers to charge solutions and battery swapping services.
NIO has recently launched an innovative ‘Battery-as-a-Service’ subscription model that allows users to purchase electric vehicles and subscribe to the usage of battery packs separately. This upgraded solution will help NIO’s vehicles stand out in the market.
On September 3rd, NIO announced the completion of the offering of 101.78 million American depositary shares. The company raised $1.30 billion from the offering and intends to use its net proceeds to repurchase equity interests and fund the overall development expenses of the company.
NIO’s revenue increased 146.4% year-over-year to $666.60 million in the third quarter ended September 2020. Gross profit rose 87.1% sequentially to $86.30 million, while gross margin increased 452 basis points sequentially to 12.9% in the third quarter.
The consensus EPS estimate for the current quarter ending December 2020 indicates a 64.1% improvement from the year-ago value. Moreover, NIO has an impressive earnings surprise history, with the company beating consensus EPS estimates in three out of trailing four quarters. The consensus revenue estimate of $965.50 million for the current quarter indicates a 137.2% growth from the same period last year. The stock has gained 1277.6% year-to-date.
How does NIO stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
A for Overall POWR Rating.
The stock is also ranked #3 out of 115 stocks in the China industry.
First Solar, Inc. (FSLR)
FSLR is a manufacturer and provider of photovoltaic solar panels and utility-scale PV power plants. It operates globally in two segments – Modules and Systems. The Module segment is responsible for the development of cadmium telluride solar modules to convert sunlight into electricity. The Systems segment is responsible for providing power plant solutions.
On September 23rd, FSLR announced that JP Energie Environment selected its photovoltaic solar modules to power the Labrade solar power plant in Europe. Supplying over 400 projects in France alone, which would establish FSLR as a leading global provider of solar solutions.
FSLR has also recently entered into an agreement with Vistra Corp. under which it will supply its PV solar modules to power Vistra’s five solar projects across Texas. This makes FSLR stand out in the solar industry as a reliable PV manufacturer and significantly increase its revenue.
FSLR’s third quarter ended September 2020 net sales rose 69.6% year-over-year to $927.57 million. Net income grew 406.3% from the prior-year quarter to $155.04 million, while gross profit grew 111.8% from the same period last year to $293.02 million. EPS increased 403.4% from the year-ago value to $1.46.
The consensus EPS estimate of $3.71 for the current year indicates a 150.7% improvement year-over-year. Moreover, FSLR beat the street EPS estimates in three out of the trailing four quarters, which is impressive. The consensus revenue estimate of $3.02 billion for the next year indicates a 6.6% growth from the same period last year. The stock has gained 55.3% year-to-date.
FSLR’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with a “B” for Trade Grade and Buy & Hold Grade. It is ranked #2 out of 19 stocks in the Solar industry.
Canadian Solar Inc. (CSIQ)
CSIQ is a designer and manufacturer of solar power products, wafers, solar ingots, operating through two segments — Module and System Solutions, and Energy. The company serves distributors, project developers, and EPC companies internationally.
On November 23rd, CSIQ announced that it has entered into a power purchase agreement with BTG Pactual to supply solar energy from a 170 MWp cluster of projects located in Brazil. This large-scale operation will help accelerate the company’s growth in the Brazilian market while optimizing their capital allocation.
On October 27th, CSIQ announced the launch of its Series 7 new generation modules to support seamless installation of solar plants. This will boost the demand for CSIQ’s products particularly in residential areas, due to its user-friendly nature.
CSIQ’s revenue increased 31.4% sequentially to $914.36 million in the third quarter ended September 2020. Operating income increased 29.9% sequentially to $59.05 million, while gross profit rose 21.2% sequentially to $178.42 million over this period.
CSIQ beat the street EPS estimates in each of the trailing four quarters, which is impressive. The consensus revenue estimate of $996.69 million for the current quarter ending December 2020 indicates 8.4% growth from the year-ago value. The stock has gained 80.2% year-to-date.
It’s no surprise that CSIQ is rated “Buy” in our POWR Ratings system. It has an “A” for Trade Grade and a “B” for Buy & Hold Grade. Among the 19 stocks in the same industry, it is ranked #4.
Renewable Energy Group, Inc. (REGI)
REGI is a leading provider of low carbon transportation fuels, operating through Biomass-Based Diesel, Services, and Corporate and Other segments. The company sells petroleum-based heating oils and diesel fuels and operates fermentation facilities. It owns and operates a network of 13 biorefineries in the United States and Europe.
REGI has recently announced its plan to expand production capacity of its Geismar Renewable Diesel Plant from 250 million gallons annually to 340 million gallons per year. The company expects to deliver sustainable fuel solutions to meet its increasing customer demand.
On September 22nd, REGI’s wind turbine project broke ground to power the company’s biorefinery in Minnesota. This innovative approach will help the company to lower its carbon footprint and thereby, strengthen its position in the clean energy industry.
REGI’s sale of self-produced biodiesel increased by 6 million gallons year-over-year in the third quarter ended September 2020. Gross profit increased 225% from the year-ago value to $78 million over this period.
The consensus EPS estimate of $4.92 for the next year indicates a 62.4% improvement year-over-year. Moreover, REGI has an impressive earnings surprise history, with the company beating consensus EPS estimates in three out of the trailing four quarters. The consensus revenue
estimate of $2.33 billion indicates a 10.9% increase from the same period last year. The stock has gained 114.3% year-to-date.
REGI’s promising outlook is reflected in its POWR Ratings. It is rated “Buy” with an “A” for Trade Grade and Peer Grade, and a “B” for Buy & Hold Grade. It is ranked #1 out of 60 stocks in the Energy – Services industry.
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NIO shares were trading at $52.77 per share on Tuesday afternoon, down $2.61 (-4.71%). Year-to-date, NIO has gained 1,212.69%, versus a 14.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...
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