Good afternoon traders,
The pre-market gap caused some sideways trading today as profit takers came in. SUNW did break the 200 DMA today as expected. http://stockcharts.com/h-sc/ui?s=sunw
Cowen issued full coverage and the 4th quarter results today with a price target of $5.50 for Sunworks, Inc. (NASDAQ: SUNW) This report offers a lot of insight- https://broadstreetalerts.com/wp-content/uploads/2016/03/Cowen_SUNW_CoNote_2016-03-14.pdf
Excerpt from the above report issued today
The Cowen Insight
“Backlog Stands at $47.5mn Offering Visibility Into $100mn Guidance for 2016”
Keep an eye on this one going forward, looking to hold above the 200 DMA for another breakout. Seems quite undervalued at $3.05/share.
We are watching a NASDAQ technology play right now trading not far off 52 week lows with great news out. This will be released after market open tomorrow. Only if the setup looks right.
We will be back soon. Have a good night everyone.
The Team
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Analyst Report: Sunworks Inc. to Report Earnings March 14; Beats Guidance!
Summary:
Sunworks, Inc., formerly Solar3D, Inc., incorporated on January 30, 2002, is a provider of solar power solutions. The Company is focused on the design, installation and management of solar power systems for commercial, agricultural, residential and municipal customers. The Company is a solar systems provider in the western United States, delivering over 2.5 kilowatts to multi-megawatts commercial systems.
The Company provides energy solutions and services to its customers, including project management and installation support, solar energy performance assessments, solutions consultations, materials and equipment procurement support, as well as rebates and incentives management. It is a solar installation and consulting company that offers financing and leasing options for its customers. It offers Property Assessed Clean Energy (PACE) financing program for financing home solar energy systems. The Company provides various system offering solutions, such as roof mounted solar systems, dual-axis trackers, ground mounted systems, carport or trellis solar system, post or pole mounted solar systems and tilted single axis trackers.
Sunworks, Inc. has a current market capitalization of $57.02 M with 17.79 M outstanding shares. Its daily average volume traded is 106,960 shares.
Financial Highlights (Q3 2015):
Revenue: 19.73 M
Gross Profit: 5.33 M
Net Income: 1.40 M
Cash and Cash Equivalents: 9.26 M
Total Debt: 2.33 M
Recent News and Analysis:
The company, Sunworks Inc. (Previously Solar3D) recently announced that it has secured approximately $9.4 million in contracts with multiple cities and schools in the Northern California region to establish long term, cost saving solar energy solutions. These awards support the company’s 2016 outlook for more than $100 million in annual revenues. With a population of approximately 50,000, West Sacramento resides in Yolo County, separated from Sacramento by the Sacramento River. The $3.4 million agreement will provide 943kW of solar solutions across four sites, including car ports and a water storage tank roof. Sunworks’ proposed program that stood alone over several other bids, will achieve significant energy cost savings for the City, providing both short term and long term return on investment.
Additionally, the company announced that it will host a conference call and live webcast to discuss the results of the fourth quarter and fiscal year 2015, to be held Monday, March 14, 2016 at 10:00 AM Eastern Time. The company will report its fourth quarter and full year 2015 financial results before the market opens on Monday, March 14, 2016.
This morning’s earning, if as expected, will confirm that management’s revenue estimates fall within guidance. This will have a huge impact on share price as management previously stated that they expect revenues in excess of $100M, keep in mind the company’s current market cap is $57 M; that’s a price-to-sales of 0.5x (not quite market standard). Given the forward P/E of 38x published on yahoo finance, and applying management guidance revenues and profit margins, a price target of $15.20 is derived. To remain more conservative, a P/E of 15x would generate a price target of $6.00; an upside of 86% from today’s share price.
Conclusions:
The upside potential with SUNW is massive, given that management’s guidance is realistic and will be achieved. Should this occur this morning when the FYE 2015 financials are released, the stock will likely see a massive boost. Analysts on the street have similar views with Cowen, who initiated coverage in August 2015, believes a $5.00 price target is fair. Additionally, analyst Jeffrey Osborne commented, “We see the roll-up strategy of regional installers in California as a sound move given the strong growth prospects in the western U.S. We see California in particular as least exposed to the pending expiration of the solar investment tax credit (ITC) at the end of 2016 given the economics of solar are still very compelling. In addition, we highlight the company is focused solely on cash/loan business offerings and is not bogged down by lease accounting or retained projects on the balance sheet.” With a strong balance sheet, positive and growing revenues, gross profits and net income, and very positive guidance from management, this small cap can be a massive winner in the following six to twelve months. As always, remember your due diligence before investing in small caps, and look for the risk minimizing characteristics that SUNW displays.
Sources:
- http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=SUNW.O
- https://www.google.ca/finance?q=NASDAQ%3ASUNW&fstype=ii&hl=en&gl=ca&ei=wpXmVqm6BMWd2Aas8ovwBg
- http://finance.yahoo.com/q?s=sunw&ql=1
- http://www.streetinsider.com/Analyst+Comments/Cowen+Starts+Solar3D+(SLTD)+at+Outperform/10800784.html
- http://finance.yahoo.com/news/sunworks-announces-over-9-million-134500669.html
- http://finance.yahoo.com/news/investor-calendar-invites-sunworks-fourth-210800936.html
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