SolarCity Earnings Reflect Bookings and M&A

On Tuesday,

reported its fourth quarter results. The company handily beat the consensus EPS by reporting a loss of $0.46 share and reported $47.30 million. Analysts were looking for the company to report a loss of $0.56 per share on revenue of $45.27 million. SolarCity guided its first quarter revenue to be $50 to $56 million, ahead of the consensus estimate of $46 million. The company is guided its EPS to be a loss of $0.70 to a loss of $0.80 due to the reallocation of past and future expenses in the quarter. SolarCity reported record residential bookings in January and February which resulted in over 103MW of bookings in the quarter, above the company's guidance of 101MW. Operating expenditures rose 73 percent year over year in the quarter to $65.2 million, which reflect recent acquisitions of Paramount and Zep. The company spent $234.9 million on investing activities. As a result, operating cash flow fell to $13.9 million from $57 million a year ago.

Vishal Shaha, research analyst at

believes that SolarCity is benefiting from a continued strength in bookings and the company could achieve its yearly guide of 475MW to 525MW as early as the second quarter. Shaha notes that all of SolarCity's markets are on track for a “robust” expansion as the company has proven that its products and services are beneficial for consumers. Shaha believes that SolarCity will benefit from decreases in customer acquisition moving forward. Currently, the cost to acquire a customer remains in the $2,000 to $3,000 range. SolarCity receives the majority of its panels from Chinese manufacturers but Shaha noted that the company will begin diversifying its suppliers. Shares are Buy rated with a $90 price target.

Brian Lee, analyst at

remains positive on SolarCity and kept shares as a top idea in its Conviction List. Lee remains positive on SolarCity's ability to hit management's 475MW to 525MW installation targets given a bullish sentiment on the overall growth momentum in US solar rooftop installations. The company's momentum coupled with the growing industry should result in further share gains and the company achieving a positive cash flow in 2014. Shares are Conviction List Buy rated with a price target slightly reduced to $85 from a prior $88 given a higher operating expenditure.