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SunPower (SPWR) Down 17.8% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for SunPower (SPWR - Free Report) . Shares have lost about 17.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is SunPower due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

SunPower Q3 Earnings Top Estimates, Revenues Rise Y/Y

SunPower Corporation reported third-quarter 2021 adjusted earnings of 6 cents per share, which surpassed the Zacks Consensus Estimate of 2 cents by a whopping 200%. The bottom line compared favorably with the year-ago quarter’s loss of 4 cents.

Excluding one-time adjustments, GAAP loss was 49 cents per share, against the prior-year quarter’s earnings of 57 cents.

Operational Results

During the quarter under review, SunPower’s revenues were $323.6 million, which lagged the Zacks Consensus Estimate of $326 million by 0.6%. However, the top line improved 17.8% from the year-ago quarter’s $274.8 million. The year-over-year upside in revenues can be attributed to strong residential demand.

Total operating expenses in the quarter increased 36.3% year over year to $53.5 million. Higher sales, general and administrative expenses led to the upside.

Financial Position

SunPower had cash and cash equivalents of $268.6 million as of Oct 3, 2021, compared with $232.8 million as of Jan 3, 2021.

Long-term debt was $42.1 million as of Oct 3, 2021, compared with $56.4 million as of Jan 3, 2021.

Q4 & 2021 Outlook

For fourth-quarter 2021, the company expects to generate revenues of $330-$380 million, which excludes revenues from CIS and Legacy business. Revenues for the CIS and Legacy business are expected in the range of $31 million to $41 million. Fourth-quarter GAAP net income guidance, which includes all segments, is expected in the range of loss of $5 million to earnings of $15 million.

For 2021, the company expects to generate adjusted revenues below the prior guidance of $1.41-$1.49 billion, primarily due to CIS project schedule delays. The Zacks Consensus Estimate for 2021 revenues is pegged at $1.33 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -67.78% due to these changes.

VGM Scores

At this time, SunPower has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise SunPower has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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