SunPower is trying to expand its retail customer base with new loans
Alternative energy stable SunPower Corporation (NASDAQ: SPWR) announced on March 18 that it would offer qualified homeowners new low annual percentage (APR) loans for residential solar and storage customers. The new loan would allow customers to generate their own solar energy for just $ 72 a month, while SunPower could also attract a larger number of residential customers.
It’s been a strange year for SunPower stock. After hitting a 13-year high of $ 57.51 on Jan. 29, stocks pulled back sharply to consolidate above $ 30. The good news is that chart support appears to be building on the 100-day moving average of SPWR. The bad news is that shorts are likely to cheer the recent skid, selling a healthy 22.7% of the stock’s total available float short. Analysts, meanwhile, remain pessimistic, with 12 out of 13 maintaining “hold” or worse ratings. But here at Schaeffer, this could establish justice as a possible contrary game with a convenient entry point.
From a fundamental standpoint, SunPower, while still lacking in many key areas, has seen strong net income growth in recent years. In fiscal 2020, SunPower increased net income approximately $ 576 million, or 2,700%, and increased total net income to $ 598 million. Additionally, SPWR has generated net income of approximately $ 1.45 billion over the past four years, up from $ 851 million in net loss for fiscal 2017.
On the flip side, however, SunPower’s revenue declined by $ 740 million, or 40 percent, last year. The company’s total annual revenue is currently $ 1.1 billion. Prior to FY 2020, sales would fluctuate above and below $ 1.8 billion if there was little consistency. Overall, the biggest problem for SPWR is valuation. Despite its bearish shape, SunPower stock still has a huge price-earnings-ratio of 79.37.
Now may be a good time to consider the next move in SunPower stock with options. The Schaeffer’s Volatility Index (SVI) of 88% is above the 9th percentile of all other values of the past year. In other words, option providers are currently pricing in lower than usual volatility expectations. After all, that’s security Schaeffer’s Volatility Scorecard (SVS) is at an increased value of 85 out of 100. This shows that the security exceeded volatility expectations in the past year.