Setting Itself Apart
"We note SPWR's core diversification across business lines bodes well for the company's hiring, as management could well take advantage of new opportunities in the South while simultaneously gaining share on the resi side, for example," analyst Julien Dumoulin-Smith wrote in a note.
On the sector front, UBS's analysis of online hiring data at solar companies suggests a continued drastic slowdown, especially in the residential sector, coincident with the ITC extension in late December.
Recent guidance cuts from SolarCity Corp SCTY underscores these findings.
"This is unprecedented in our data set, demonstrating the magnitude of the slowdown in the sector, while SCTY's historic 30–40 percent market share in the resi space may be disproportionately affecting these results, particularly as the company scales back on costs and focuses on cash conservation," Dumoulin-Smith noted.
What Tesla Means For The Sector
Further, the analyst sees the timing of the Tesla Motors Inc TSLA bid "as driven in large part by the need to save costs and add financial stability."
"On the other hand, we believe potentially weak net metering application data suggests the problem could be more widespread," Dumoulin-Smith explained.
Meanwhile, the analyst noted that Sunrun Inc RUN appears to be reacting against the trend "as online job postings for installers continue their steady climb," an indication that SolarCity is losing share to smaller players among a relatively strong residential market elsewhere.
In addition, UBS's analysis shows that online solar installation and sales jobs are gaining steam in the Southeastern states. The data points also look favorable, as Georgia Power approved several RFP's for solar, up to about 1.6GW.
"This reinforces our view that Southern Solar remains one of the most misunderstood opportunities over the next several years, and we continue to see significant utility procurement of large scale solar going forward," Dumoulin-Smith added.
Shares of SunPower fell 2.82 percent to close at $14.46 on Thursday.
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