SolarCity's Record-Setting Report Excites Some Analysts

In a press release Wednesday, SolarCity Corp SCTY announced its financial and operating results for 2Q.

SolarCity reported total GAAP revenue up 52 percent sequentially and 68 percent Y/Y to a record $102.8 million. GAAP Operating Lease and Solar Energy Systems Incentive Revenue came in at $78.3 million, representing 81 percent growth Y/Y. Solar Energy System Sales and Components Revenue was $24.5 million. The company announced non-GAAP EPS of was $1.61 for the quarter.

SolarCity guided to 3Q GAAP revenue of $80 million – $86 million for Operating Lease and Solar Energy Systems Incentive Revenue, representing 59 percent Y/Y at the midpoint. Solar Energy System and Component Sale Revenue is expected to range between $26 million and $28 million. The company guided to non-GAAP Loss Per Share of between ($2.05) – ($2.15).

Credit Suisse Ups PT

Credit Suisse analyst Patrick Jobin maintained an Outperform rating on SolarCity, while reducing the price target from $99 to $105.

Jobin said that the record bookings reported by the company highlighted the robust demand backdrop. The bottom line was “strong execution” during the quarter and “bullish commentary” on outlook, the report said, while adding that the increased disclosure of PowerCo’s cash flow “further supports valuation.”

Northland Capital Cites Value Creation

Northland Capital Markets analyst Colin Rusch maintained an Outperform rating on the company, while raising the price target from $68 to $69, citing value creation by the company.

Rusch said, “SCTY executed ahead of its installation targets in 2Q while booking a record 395MW of contracts and providing new granularity into the cash flow assumptions from its operating portfolio… SCTY continues to minimize shareholder dilution in our view via creative capital strategies including ABS and solar bonds. Finally, we believe investors will welcome SCTY’s new disclosures of CAFD-like standalone cash flow projections for its solar asset base.”

Roth Capital Says Catalysts Ahead

Roth Capital Partners analyst Philip Shen maintained a Buy rating and a price target of $98 for SolarCity.

Shen said that the lower guidance, driven mainly by utility inspection delays which are “out of the company's control,” may exert pressure on SolarCity’s stock. “[W]e would be buyers of SCTY at current levels,” the analyst said, while adding that the company was a top pick and that sentiment was expected to remain positive, “given attractive catalysts ahead.”