Now, the biggest USA rooftop solar provider is ready to slow down, a decision that helped drag the shares down the most on record.
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In response, the company’s stock was down 20 percent to $30.59 in the after-hours trading.
For the fourth quarter the solar company expects revenues of $70 to $76 million in its operating lease and solar energy systems division, an increase of 48% year-over-year for the quarter.
After posting a bigger-than-expected loss last night, the company told investors it wants to focus on cutting costs and improving cash flow next year and is no longer targeting the same growth level ahead. The company was founded by Peter and Lyndon Rive, and Elon Musk, their cousin, is chairman. SolarCity is scaling back its installation forecast for this year, focusing on reducing costs and de- emphasizing an earlier goal of signing up a million customers by July 4, 2018. Though he sees long-term value generation potential, Callo predicts significant near-term pressure on the stock until the company shows it can reach its free cash flow target.
The companys investor base has largely been focused on growth, and the transition from growth to value could take time given the complexity of the model, Kallo said in a research note. With installations here likely to slow down, SolarCity has been expanding overseas to create a cushion. If you dig into the company’s numbers and look beyond the GAAP revenue the company recognizes each quarter, the huge portfolio of cash-flow-producing contracts it has accumulated – valued at almost $9 billion now – is a direct result of the company’s investments in sales and marketing. This would represent year-over-year growth of 58%-69% and would translate into full-year 2015 installations of 878-898 MW.
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Excluding the $17.8 million MyPower warranty and the $12.3 million loss on hedges, Non-GAAP loss per share for the quarter was $2.10. They could double again next year if they wanted to but it makes sense for them to prepare for lower margins.
