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Why Is SunPower (SPWR) Down 7.1% Since its Last Earnings Report?

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It has been about a month since the last earnings report for SunPower Corporation (SPWR - Free Report) . Shares have lost about 7.1% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is SPWR 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 Q1 Loss Narrower Than Expected, Sales Top

SunPower Corp. incurred first-quarter 2018 adjusted loss of 20 cents per share, which came in narrower than the Zacks Consensus Estimate loss of 34 cents. In the year-ago quarter, the company reported loss of 36 cents per share.

Excluding one-time adjustments, the company incurred a GAAP loss of 83 cents per share, narrower than the year-ago loss of $1.58.

Operational Results

During the quarter, SunPower reported adjusted revenues of $399 million, surpassing the Zacks Consensus Estimate of $340 million by 17.3%. However, the reported revenues declined 7.1% from the year-ago figure of $429.5 million.

Total operating expenses were up 47.7% to $144.3 million due to higher restructuring expenses and impairment of residential lease assets.

Financial Position

SunPower had cash and cash equivalents of $260.7 million as of Mar 31, 2018 compared with $435.1 million as of Dec 31, 2017.

Long-term debt was $431.7 million as of Mar 31, 2018 compared with $430.6 million as of Dec 31, 2017.

In the first quarter, net cash outflow from operating activities was $233.3 million against cash outflow of $126.9 million in the year-ago quarter.

Guidance

The company expects adjusted revenues in the range of $375-$425 million for second-quarter 2018.  Adjusted gross margin is estimated to be in the 6-8% range. The company expects to deploy 350-380 megawatts in the quarter.

SunPower continues to anticipate adjusted revenues for 2018 to lie in the range of $1.8-$2.2 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There have been four revisions lower for the current quarter. Last month, the consensus estimate has shifted by 12.1% due to these changes.

SunPower Corporation Price and Consensus

 

VGM Scores

Currently, SPWR has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. The stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

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

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, SPWR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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