According to Wall Street: 2 Solar Stocks to Buy, 1 to Sell

NASDAQ: SPWR | SunPower Corporation News, Ratings, and Charts

SPWR – Favorable government policies and the increasing installations of solar power units in residential and industrial areas have been driving the solar industry’s growth. But although most solar companies can overcome current supply-chain challenges, some might struggle in the near term. So, Wall Street analysts recommend buying Sunnova Energy (NOVA) and FTC Solar (FTCI). But they fear SunPower Corporation (SPWR) could witness a downtrend. Let’s discuss.

The recent passage of a $1.75 trillion infrastructure bill, which offers significant funding and tax credits for the renewable energy and electric vehicle (EV) industries, should bode well for the solar industry. The growing demand for solar power units for household and industrial uses is expected to incentivize solar companies to develop efficient photovoltaic panels, energy storage solutions, and grid-tied systems. The global solar energy market is expected to grow at a 20% CAGR to reach $200 billion by 2026.

Although ongoing supply chain bottlenecks could affect the industry’s production in the near term, rising government support should help the industry keep growing. Investors’ interest in solar stocks is evident in the Invesco Solar Portfolio ETF’s (TAN) 14.3% returns over the past six months.

Given this backdrop, Wall Street analysts recommend buying Sunnova Energy International Inc. (NOVA) and FTC Solar, Inc. (FTCI). However, they recommend that SunPower Corporation (SPWR) be avoided.

Stocks to Buy:

Sunnova Energy International Inc. (NOVA)

NOVA, in Houston, Tex., is a residential solar and energy storage service provider that offers operations and maintenance, monitoring, repairs and replacements, equipment upgrades, on-site power optimization, and diagnostics services. It operates a fleet of residential solar energy systems with a generation capacity of approximately 790 megawatts.

On November 10, 2021, NOVA and Brinks Home announced an exclusive partnership that allows NOVA to offer options from the Brinks Home portfolio of smart home security solutions and allows Brinks Home dealers and authorized representatives to offer SUN’s suite of solar, battery, and energy services to their customers. Both companies are looking forward to expanding the market for their products.

NOVA’s revenue for its fiscal third quarter, ended September 30, 2021, came in at $68.90 million, representing a 37.3% year-over-year improvement. The company had $408.16 million in cash as of September 30, 2021.

NOVA’s revenue is expected to rise 51% year-over-year to $242.82 million for the current year. The stock’s EPS is expected to grow at a 113.4% rate per annum over the next five years.

NOVA has gained 26.3% in price over the past six months. All 10 Wall Street analysts that have rated the stock have rated it Buy. The $57.10 average price target for the stock indicates a 56.2% upside potential.

FTC Solar, Inc. (FTCI)

Austin, Tex.-based FTCI provides solar tracker systems, technology, software, and engineering services internationally. The company serves project developers, solar asset owners, and engineering, procurement, and construction (EPC) contractors that design and build solar energy projects.

On November 9, 2021, FTCI announced that it had been awarded a 504 megawatts DC project, combined with 260 megawatts AC of energy storage in Arizona. FTCI will provide Voyager, its next-generation tracker producing enhanced power yields, to Moss Solar, an EPC company that received a contract from a leading Tier 1 U.S. Developer to construct the solar plus storage facility. FTCI is looking forward to gaining expanding reach in the Arizona market.

The company had $140.66 million in cash as of September 30, 2021. Analysts expect FTCI’s revenue to improve 30.2% year-over-year to $243.83 million in the current year. Over the past month, the stock has gained 7.5% in price. All four Wall Street analysts that have rated the stock have rated it Buy. The $12 average price target indicates a 37.1% upside potential.

Stock to Sell:

SunPower Corporation (SPWR)

SPWR designs, manufactures, and delivers solar panels and systems to residential, commercial, and utility-scale power plant customers worldwide. The San Jose, Calif.-based company also offers commercial roof, carport, ground-mounted systems, and post-installation operations and maintenance services. In addition, it provides residential leasing program services and sells inverters manufactured by third parties.

On October 5, 2021, SPWR acquired Blue Raven Solar, one of the fastest-growing residential solar providers. Blue Raven’s growth trajectory and complementary geographic footprint will enable SPWR’s advanced solar solutions to quickly reach the solar market and serve more customers in underpenetrated areas.

SPWR’s net loss came in at $84.31 million for its fiscal third quarter, ended October 3, 2021, compared to $45.11 million in net income in the year-ago period. Its net loss came in at $0.49, versus an EPS of $0.24 in the prior-year period. The company had $268.57 million in cash as of October 3, 2021.

Analysts expect the stock’s EPS to decline at a rate of 66.5% per annum over the next five years. SPWR stock has declined 3.9% in price over the past month. Of  11 Wall Street analysts that have rated the stock, five rated it Sell. The $27.50 average price target indicates a 3.5% potential downside.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


SPWR shares were unchanged in premarket trading Monday. Year-to-date, SPWR has gained 11.04%, versus a 23.96% rise in the benchmark S&P 500 index during the same period.


About the Author: Sweta Vijayan


Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
SPWRGet RatingGet RatingGet Rating
NOVAGet RatingGet RatingGet Rating
FTCIGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


When Will the Next Bull Rally Begin?

Beyond the Mag 7 bolstered S&P 500 (SPY) the market is enduring a full blown correction. Steve Reitmeister shares his views on what is happening and how to invest going forward in this updated market commentary.

3 Streaming Giants Ending the Year on a High Note

The video streaming industry is rapidly evolving, driven by technological advancements and a surge in on-demand content. In this ever-evolving dynamic industry, fundamentally robust streaming stocks Amazon (AMZN), Netflix (NFLX), and Disney (DIS) could be solid buys. Keep reading...

3 Gold Miners Glittering with High Upsides

With lingering market fluctuations, gold continues to glitter with its stable prospects. In this volatile landscape, investing in Barrick Gold (GOLD), Alamos Gold (AGI), and Kinross Gold (KGC) could provide some relief to investors and solidify their long-term profits. Read on…

3 Digital Entertainment Companies Capitalizing on Streaming Growth

The digital entertainment industry is rapidly evolving, with new innovations being introduced almost every day. In this ever-changing dynamic, fundamentally solid entertainment stocks Amazon (AMZN), Netflix (NFLX), and Roku (ROKU) could be solid buys. Keep reading...

Stock Investors: Are You “Fed Up”?

The post 12/18 Fed meeting sell off caught many by surprise as the S&P 500 (SPY) broke under 6,000 for the first time this December. What is happening? And why? And what comes next? Steve Reitmeister shares his view in the fresh article to follow...

Read More Stories

More SunPower Corporation (SPWR) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All SPWR News