Sunpower Inc is an American Solar power company with a mixed outlook. The financials are poor, but technicals suggest further upside towards $32.44.
Sunpower Inc (NASDAQ: "SPWR") is an American Solar power and energy storage company that was founded in 1985 The largest shareholder at current is Total Energy, owing roughly 66% of the company. Sunpower went public in December 2005 at just $18, The stock peaked in November 2007 at $164. As a result of this high close, given its current price, there is potential for scope in the share price.
From a financial aspect, the stock is mixed. The total market cap is $4.4bn with 2020 revenue at $1.1bn and a profit after tax of $597m. However non-operating profit was $660m so in 2020 it looks as though Sunpower got some grant/aid or financial boost. Looking at the income statement, it is actually quite hard to spot any form of recurring trend and income is all over the place. Q1 2021 revenue was $306m, the company took a loss on this of $59m. If they keep that up, 2021 will see a $1.2bn turnover with a $200m loss. Looking into the balance sheet, last quarter cash on hand was $549m with total assets amounting to $1.594bn. Total liabilities amounted to $1.233bn leaving the company net positive $360m. $100m less than Q4 2020. Overall again, The balance sheet is similar to the income statement in that it is hard to suggest or predict what the future numbers will look like.
From a technical aspect, Sunpower stock looks bullish. MACD trends positive with RSI reading of 58.7, suggesting fair value. The stock peaked back in February 2021 to $57.48 and has since declined, however on 20th May, the stock broke out of the declining resistance and formed support below, which has continued to hold. Based on that, support sits at $23.78 followed by $21.16. A break below here could signal further downside to $20 and then $15.92. Looking to the upside, initial targets/resistance sit at $29.37 followed by $32.44. The Stock does trend outside the Bollinger band, so a pullback is very possible at its current price, however, this could be a good entry point ($23.78). The initial target is 'B' on the chart ($32.44). It could take a few months before we get there though.
Overall this stock is mixed, from a technical aspect the stock broke out in May and is heading higher based on technicals analysis, however, the financials are difficult to predict. The company isn't 'profitable and the balance sheet isn't great. fundamentally this would be a risky stock to pick, but from a technical aspect the stock is breaking out. Therefore in the case of Sunpower, perhaps looking at the market and market trends would be more important. The company has been around for 36 years and has a huge profitable shareholder, Total - which will have an active interest in the future of Sunpower. It is in an emerging market and anything that promotes green living or sustainability is going to be backed by Governments and asset managers given the cycles of the world economy.
