Solar Energy Stock Dimmed by Revenue Miss

The security still sports an over 744% nine-month lead

Digital Content Manager
Feb 18, 2021 at 10:41 AM
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The shares of SunPower Corporation (NASDAQ:SPWR) are getting pummeled this morning, down 6.4% to trade at $40.80. This comes after the alternative energy concern reported better-than-expected fourth-quarter earnings, but also a revenue miss. However, SunPower said strong industry tailwinds, federal policy support, and increased demand for residential and commercial storage solutions could lead to better results in 2022. As a result, the security earned three price-target hikes, including a substantial one from Cowen and Company to $38 from $17.

Digging deeper, the equity has had a volatile run on the charts of late. Though a number of bull gaps pushed shares to a Jan. 29, 13-year high of $57.51, SunPower stock quickly pulled back from those higher levels, only to rally again a couple of weeks later. The 40-day moving average easily contained those falls, though, and seems poised to continue acting as a floor today. Over the last nine months, the security has added more than 744%.

The brokerage bunch was overwhelmingly pessimistic towards SunPower stock coming into today, leaving plenty of room for additional price-target hikes and/or upgrades going forward. Of the 11 analysts in question, 10 called the equity a tepid "hold" or worse. Plus, the 12-month consensus target price of $24.43 is a whopping 39.1% discount to current levels.

Meanwhile, short sellers are hitting the exits in droves, but there is plenty of pessimism left to be unwound. Short interest fell 44.5% in the most recent reporting period, yet the 25.84 million shares sold short still account for 31.9% of the stock's available float, or nearly three days' worth of pent-up buying power.

Lastly, SunPower stock looks like it has been a good target for premium buyers in the past year, based on its Schaeffer's Volatility Scorecard (SVS) of 98 out of 100. This means the shares have regularly made bigger moves than options traders were pricing in the past 12 months.

 

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