While significant emphasis is being placed on almost all clean energy sources globally, the solar power segment is attracting much investor attention and capital investments. Government incentives and declining installation and maintenance costs are also driving the solar energy market, which is expected to…
grow at a 20.5% CAGR over the next five years to $223.30 billion by 2026.
The industry is expected to remain constrained by the impact of supply chain bottlenecks and equipment shortages over the next few years, however. Furthermore, a global semiconductor chip shortage is affecting the industry’s production targets because semiconductors are a crucial component in battery storage and solar inverters.
So, although the solar industry’s long-term outlook remains bright, we think its bleak short-term growth prospects make highly overvalued stocks Sunnova Energy International Inc. (NOVA – Get Rating), Beam Global (BEEM – Get Rating), and Solar Integrated Roofing Corporation (SIRC – Get Rating) best avoided now.
NOVA, together with its subsidiaries, provides residential solar and energy storage services. The company also offers operations and maintenance, monitoring, repairs and replacements, equipment upgrades, on-site power optimization, and diagnostics services.
NOVA’s 29.37 forward EV/Sales multiple is 565.5% higher than the 4.41 industry average. In terms of forward Price/Sales, NOVA is currently trading at 18.33x, which is 637.8% higher than the 2.48x industry average.
NOVA’s operating loss increased 178.9% year-over-year to $14.34 million in its fiscal second quarter ended June 30. Its net loss increased 151% from its year-ago value to $63.40 million. The company’s net loss per share increased 90% year-over-year to $0.57.
A $65.03 million consensus revenue estimate for the fiscal third quarter, ending September 30, 2021, indicates a 29.6% improvement from the same period last year. However, analysts expect the company’s EPS to remain negative at least until the following year. The company missed consensus EPS estimates in each of the trailing four quarters.
NOVA has lost 16.4% year-to-date. Over the past six months, the stock’s price has declined 18.1% to close yesterday’s trading session at $37.32.
NOVA’s POWR Ratings reflect its poor prospects. The stock has an overall F rating, which equates to Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
NOVA has an F grade for Value, Sentiment, and Quality, and D for Momentum and Stability. Among the 21 stocks in the F-rated Solar industry, NOVA is ranked #18.
Beyond what we’ve stated above, we have also rated NOVA for Growth. Click here to view all NOVA ratings.
BEEM designs, manufactures, and sells renewable energy products for electric vehicle (EV) charging infrastructure, outdoor media and branding, and energy security products. The company produces primarily two categories of products: EV ARC (Electric Vehicle Autonomous Renewable Charger) and the Solar Tree.
In terms of forward EV/Sales, BEEM is currently trading at 21.36, which is 1,010.3% higher than the 1.92 industry average. In addition, its 23.18 forward Price/Sales multiple is 1,397.4% higher than the 1.55 industry average.
BEEM’s gross loss increased 276.2% year-over-year to…
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