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SolarCity Q1 Demand Nipped By Rivals Sunrun, Vivint Solar

No. 1 residential installer SolarCity ( SCTY ) lagged rivals Sunrun ( RUN ) and Vivint Solar ( VSLR ), as March solar applications in California declined year over year, while the entire segment trailed triple-digit commercial growth, a Credit Suisse analyst said Thursday. Credit Suisse analyst Patrick Jobin’s report follows SolarCity’s Q1 earnings, released late Monday. SolarCity stock was blistered this week on Q2 guidance that missed views, while its 2016 installation outlook  was cut on Q1 bookings that fell 150 megawatts flat. Sunrun is slated to report its Q1 earnings late Thursday. In midday trading on the stock market today , SolarCity stock was down 1.5%, after its shares dove 21% on Tuesday in reaction to the company’s earnings report. Sunrun and Vivint stocks were down 3% and 1%, respectively, midday Thursday. SolarCity’s “horrendous” bookings and weak guidance appear to be self-inflicted, Jobin wrote in a research report. “We do see modest growth decelerating in California but note that all growth is not gone,” he wrote. “Sunrun, who reports this afternoon, appears to have fared better in Q1.” For Q1, Sunrun is expected to report $87.7 million in sales, down 12% quarter over quarter, and a 48-cent per-share loss minus items, widening from a 15-cent loss in the previous quarter. SolarCity and Vivint each reported March-quarter losses this week. Excluding Nevada — which accounted for 12 MW in Sunrun’s backlog — Q1 deployments are expected to be flat sequentially. SolarCity and Sunrun exited Nevada in December when regulators cut net-metering payments to solar customers. In March, SolarCity’s residential applications fell 8% year over year vs. 17% and 23% growth from Sunrun and Vivint, respectively, Jobin wrote. Total residential applications for 73 MW of solar to utility companies grew 14.5% vs. last year. The commercial segment was the main driver in March, where 41 MW in total applications were up 136% year over year. Third-party ownership also picked up in March, reaching 62% of all residential applications vs. the 60% average for the second half of 2015.

Broad Security Freeze: Palo Alto Demand Stalls; Q2 Views Lukewarm

Palo Alto Networks ( PANW ) stock tumbled Thursday after a Piper Jaffray analyst said that lackluster April demand and Q2 guidance from Check Point Software Technology ( CHKP ), FireEye ( FEYE ) and Imperva ( IMPV ) could signal a broad cybersecurity slowdown. IBD’s 26-company Computer Software-Security industry group is down 18.5% for the year after toppling 32% through Feb. 9, on bleak guidance for IT spending from firms like LinkedIn ( LNKD ) and Tableau Software ( DATA ). Barracuda Networks ( CUDA ), Check Point, FireEye and Fortinet ( FTNT ) recently missed full-year views. Imperva and Proofpoint ‘s ( PFPT ) Q2 outlooks lagged the consensus. Now, channel checks show April demand slowed, Piper Jaffray analyst Andrew Nowinski says. “The key takeaway from Q1 earnings season is that the security sector is starting to show signs of slowing based on the guidance that was provided for Q2 and fiscal 2016,” he wrote in a research report Thursday. Cybersecurity stocks toppled Thursday on Nowinski’s assessment. IBD’s security group was down 2% in morning trading on the stock market today , with Palo Alto Networks and FireEye stocks leading the deluge, down a respective 6% and 4%. Palo Alto Networks stock was at a two-month low, near 130. IBD’s Take: How does Palo Alto Networks stack up, and how does it compare to its rivals? Find out at IBD Stock Checkup But some analysts say Palo Alto Networks could beat guidance when it posts fiscal Q3 earnings on May 26. The company has topped the high-end of its outlook by an average 5.6% for the past 11 quarters. To do so again, Palo Alto would have to report $356 million in sales. The consensus of 43 analysts polled by Thomson Reuters models $339.4 million in April-quarter sales, which would be up 45% vs. the year-earlier quarter. But $549.5 million in July-quarter billings expectations, up 40%, might be too aggressive, Nowinski wrote. During the April quarter, some delays in large contracts likely hurt Palo Alto Networks, Nowinski wrote. “Most (resellers) thought it was simply due to a ‘digestion period’ where customers were still trying to integrate products they purchased in 2015,” he wrote. “The results definitely indicate demand slowed sequentially and also on a year-over-year basis.” Nowinski expects Palo Alto Networks to at least meet estimates, but he cut his price target on Palo Alto Networks stock to 180 from 208. He reiterated an outperform rating, but wrote that “this is the first quarter in at least two years where we picked up any sort of slowdown in Palo Alto’s demand trends.”

Tesla Production Target Said To Be Achievable, Price Target Hiked

Electric automaker Tesla ( TSLA ) got a price-target increase from Evercore ISI on Thursday, as analyst George Galliers defended the automaker’s ambitious production targets. Tesla sparked debate when it said in its Q1 earnings report last week that its was moving up its goal of manufacturing 500,000 cars a year by two years, to 2018. Galliers acknowledged that this will be a tough task, given that the company made only 51,000 vehicles last year, but he said it’s not impossible. “Tesla’s proposed production ramp is aggressive, and many have suggested that it is without precedence,” he wrote in his research note, raising Tesla’s price target to 320 from 310. “However, while we are not aware of any developed-world manufacturer who has seen such an aggressive ramp since inception, certain Chinese OEMs’ (original equipment manufacturers’) production growth is not that dissimilar to what Tesla is looking to achieve.” Galliers added that Ford ( F ) had built as many vehicles in year one of some product launches, such as the Ford Focus and the F-150. Some of the skepticism has come from Tesla’s troubled launch of the Model X SUV, but Galliers, like Tesla CEO Elon Musk, dismissed the comparison. “Building cars is not like playing tennis,” he wrote. “No OEM is only as good as its last match/product launch.” Despite this vote of confidence, Tesla stock was down a fraction in early trading on the stock market today , near 208.