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Will POWERHOUSE System Aid Real Goods' (RGSE) Q4 Earnings?

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Real Goods Solar, Inc. is yet to release its fourth-quarter and 2018 results. In the last reported quarter, this solar stock witnessed a negative earnings surprise of 53.13%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

In November 2018, Real Goods Solar received the product certification for its POWERHOUS 3.0 solar shingle system, which has provided manufacturing right to the company in the United States. As of Sep 30, 2018, POWERHOUSE written reservations exceeded $127 million in potential annual revenues.

Undoubtedly, receipt of the product certificate will further boost Real Goods Solar’s revenue growth in the fourth quarter. We may expect the upcoming quarterly results to reflect the same.

However, headwinds like fluctuating oil prices and foreign currency rates with China may push up costs for the company. This, is turn, might prove detrimental to Real Goods Solar’s bottom line in the soon-to-be-reported quarter.

Management continues to believe that Real Goods Solar is in a unique position to be the first real mover in the solar shingle marketplace. With recent legislation like the California 2020 Solar Mandate and over $100 million in written reservations from roofing companies, we can expect the company to win more orders and the upcoming results to duly reflect that.

Earnings Whisper

Our proven model does not show a likely beat for Real Goods Solar this earnings season. That is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. This is not the case here.

Earnings ESP: Real Goods Solar has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3, which when combined with a 0.00% ESP reduces the probability of earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Upcoming Solar Releases

Prominent solar players like Azure Power Global , Enphase Energy (ENPH - Free Report) and First Solar (FSLR - Free Report) are yet to release their quarterly numbers.

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