According to a recent Solar Energy Industries Association (SEIA) report, the solar industry surpassed three million solar installations in 2021 and the residential solar market increased 21% year-over-year. Although supply chain constraints and rising raw material costs have negatively affected installations, the year-over-year increase in utility prices has supported the sector’s growth.
Furthermore, with the introduction of the federal solar investment tax credit (ITC), which provides a 26% tax credit for systems installed in 2020-2022, more homeowners and commercial sectors have been installing solar panels. The global solar energy market is projected to reach $223.3 billion by 2026, achieving a 20.5% CAGR.
Given this backdrop, we think it could be worth adding solar stocks ReneSola Ltd (SOL), SPI Energy Co., Ltd. (SPI), and iSun, Inc. (ISUN) to one’s watchlist. Wall Street analysts expect them to more than double in price over the next 12 months.
ReneSola Ltd (SOL)
SOL is a global solar project developer and operator that focuses on solar power project development, construction management, and project financing services. The Yaozhuang Town, China-based company operates through three segments: Solar Power Project Development; EPC Services; and Electricity Generation Revenue. As of December 31, 2020, SOL operated approximately 100 solar power projects with an aggregate capacity of 173 megawatts.
For the third quarter, ended September 30, 2021, SOL’s net revenues increased 59.4% year-over-year to $15.54 million. The company’s gross profit grew 3.1% from its year-ago value to $6.09 million. Its income from operations came in at $2.72 million. Also, the company’s net income amounted to $711,000 during the period.
SOL’s revenue increased 62.6% year-over-year to $132.12 million in its fiscal year 2022. The company has an impressive earnings surprise history; it beat the consensus EPS in three of the trailing four quarters. And its EPS is expected to grow 83.3% next year. The stock has surged 5.4% in price over the past five trading days.
Closing the last trading session at $6.02, the $13.75 average analyst price target represents a 128.4% potential upside.
SPI Energy Co., Ltd. (SPI)
Headquartered in Sha Tin, Hong Kong, SPI provides photovoltaic solutions for business, residential, government, utility customers, and investors. The company operates through the solar energy products and services segment. SPI also offers engineering, procurement, and construction services in Greece, the United States, Italy, Japan, the United Kingdom, Australia, and regulatory.
This month, SPI’s Solar business acquired the existing lease for the original 140,000 square foot Sunergy PV solar plant in Sacramento, California. With this facility, SPI should support its growth and expand the green economy with a California-based solar module manufacturing facility that will further enable the company to deliver Made-in-USA products.
During the six months ended June 30, 2021, SPI’s revenue increased 40.8% year-over-year to $79.4 million. The company’s gross profit grew 138.7% from its year-ago value to $7.4 million. And its cash and cash equivalents came in at $22.8 million at the end of the period.
SPI’s $304 million consensus revenue for the fiscal period ending December 2022 represents a 54% increase year-over-year. Its EPS is estimated to grow 37.4% next year.
The $12 consensus price target represents a 219.2% potential gain from its last closing price of $3.76.
iSun, Inc. (ISUN)
The South Burlington, Vt.-based solar company, ISUN, is a solar engineering, construction, and procurement contractor for commercial and industrial customers in the Northeastern United States. The company’s brand offerings include the iSun Energy & Mobility Hub and the iSun Oasis Smart Solar Bench. ISUN also provides electrical contracting services and data and communication services.
In November, ISUN agreed with Encore Renewable Energy, a leading innovator in community-scale clean energy, to take a strategic minority interest equity investment. Through this investment in Encore Renewable Energy, ISUN believes it will accelerate its expansion into new geographic markets and strengthen its long-standing relationship with Encore Renewable Energy.
ISUN’s revenue increased 34.5% year-over-year to $6.68 million in the third quarter, ended September 30, 2021. The company’s gross profit grew 448.1% from its year-ago value to $1.3 million. And its cash rose 3,827.6% from the prior-year quarter to $27.46 million for the nine months ended September 30, 2021.
Analysts expect ISUN’s revenue to increase 292.6% year-over-year to $165.25 million for its fiscal year 2022. Its EPS is estimated to increase 338.5% next year. Furthermore, the stock has gained 12.4% in price year-to-date.
Closing its last trading session at $6.69, the $33 average analyst price target represents a 393.3% potential upside.
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SOL shares were trading at $5.99 per share on Friday morning, down $0.03 (-0.50%). Year-to-date, SOL has declined -47.59%, versus a 24.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...
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