As the opposite of energy price, solar companies usually get the direct valuation. However in this year, after the oil price tanked below 30 per barrel and then back to 45 above, we still saw a disappointing performance of the solar stocks. Most of them experienced the doubt from the market on whether the solar companies can really make money. The oil is so cheap which made huge threats to the solar industry. Except this one, massive spending still continued in the industry which deeply impact their financials.
Solar stocks have been falling sharply this year, and a weak earnings report by SolarCity Corp. didn’t help matters Tuesday.
In its first-quarter earnings report late Monday, the company issued guidance that fell short of analyst expectations and lowered its forecast for installations due to higher prices in its commercial business.
“They’ve dialed back growth for the sake of costs,” said Andrew Bischof, an equity analyst at Morningstar. “Management needs to regain credibility of the market.”
The 25% drop in SolarCity stock Tuesday is set to be its second largest ever for the company. The slump also weighed on the Guggenheim Solar ETF, which is down 1.8% on the day.
Solar stocks are a volatile bunch, but they’re off to a particularly bad start to the year. The ETF has fallen 31% this year. SunPower is down 45% this year, First Solar sank 22%, and Trina Solar American depositary receipts slid 22%. All have fallen so far this week.
SunEdison Inc. filed for bankruptcy last month, one factor helping put a damper on the market, analysts said. The company is going to be delisted from the market, a stock used to be worth more than 20 dollar now only traded as 20 cents.