Weak Competition, Favorable Regulatory Environment Among Tailwinds For Sunworks

Sunworks Inc SUNW has attractive growth opportunities in its current markets, while also seeking to expand via acquisition, Chardan Capital Markets’ James McIlree said in a report. He initiated coverage of the company with a Buy rating and a $5 price target.

Sunworks caters to the fast-growing solar installation market. Analyst James McIlree mentioned that the company is benefitting from:

• A favorable regulatory environment
• Weakened competitors
• A robust M&A pipeline
• Dealing costs of solar modules

Surge In Revenue

Sunworks projected almost 50 percent growth in revenue this year to $100M, from the $54 million recorded in 2015. This growth would partly result from the Elite Solar acquisition. “The company’s backlog at the end of May exceeded $50 million and it has substantial visibility into its $100+ million revenue guidance,” McIlree noted.

Growth Opportunities

Sunworks has significant growth opportunity in its current markets of California and Nevada. The company is also evaluating expansion opportunities in Oregon, Arizona and others states. Sunworks has made three acquisitions in the past three and is likely to adopt an aggressive acquisition strategy going forward, the analyst commented.

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