SunPower Stock is a Value Solar Play

Solar energy systems and solutions provider SunPower NYSE: SPWR stock is relatively outperforming the benchmark indexes being down (-16%) year-to-date. Despite the falling share price, revenues are seeing a 41% growth trajectory amidst rising energy prices. SunPower owns a 41% market share among the top 60 builders in California and five national agreements among the top 20 U.S. builders. The residential solar power solutions company grew its customers by 40% adding 16,500 accounts and growing customer backlog by 169% to 13,800 bookings in fiscal Q1 2022. A 70,000 customer new homes pipeline will help drive growth in 2022. The Company is in discussions to collaborate with First Solar NASDAQ: FSLR to co-develop the world’s most advanced residential solar panel exclusive for SunPower and help diversify its supply chain. The Company is a pure-play renewable energy stock that is continuing to grow its network despite inflationary pressures. Prudent investors patiently waiting to gain exposure in the solar and clean energy segment can watch for opportunistic pullbacks in shares of SunPower.

Q1 Fiscal 2022 Earnings Release

On May 5, 2022, SunPower released fiscal Q1 2022 results for the quarter ending in March 2022. The Company reported earnings per share (EPS) of $0.02 excluding non-recurring items, versus consensus analyst estimates for a profit of $0.03, a $0.01 beat. Revenues rose 45.9% year-over-year (YoY) to $350.28 million, beating analyst estimates for $317.56 million. The Company added16,500 new customers and grew its backlog by 13,800. The Company reaffirmed fiscal 2022 guidance for adjusted EBITDA between $90 million to $110 million. SunPower CEO Peter Faricy commented, “Demand is accelerating as consumers look to solar as a more stable, secure and sustainable energy source, and this is evident as we enter the second quarter with a record backlog and pipeline for new homes. We are executing across our key growth pillars and making strategic investments to ensure SunPower can capture this demand. This includes securing nationwide coverage through our direct business and dealer network, creating a world-class customer experience, building out our installation capacity, and developing industry-leading financial products, hardware, and software solutions."

Conference Call Takeaways

CEO Faricy reviewed the growth metrics for the quarter including the 41% top-line growth, 40% customer growth, and 118% new dealer growth for the SunPower direct channel. The Company will team with First Solar to develop high-efficiency, tandem thin film, and polysilicon modules in the next 18 to 24 months. This will keep SunPower at the forefront of residential solar technology. He went on to update its five pillars of success progress. For customer experience, the Company raised its Net Promoter store to 49% from 35%. Phone and chat service levels improved as customer wait times drop by 48% to less than a minute. New products grew to 26 and 52-kilowatt-hour options with a 10-year warranty. The Company now covers 71% of the U.S. geography with its network of new dealers and expansion of the mySunPower app. SunPower Financial has grown its customer finance attachment bookings by 86% with over 8,500 added in the quarter. For 2022 to date, SunPower Financial also added more than $2 billion of third-party capital for new multi-year leases and loans.

SPWR Opportunistic Pullback Levels  

Using the rifle charts on weekly and daily time frames provides a broader view of the landscape for SPWR stock. The weekly rifle chart peaked at the $25.37 Fibonacci (fib) level before sinking to a low of $12.78. Shares have staged a rally attempt. The weekly rifle chart downtrend has stalled out with a rising 5-period moving average (MA)at $17.34 and a 15-period MA at $18.66. The weekly stochastic crossed back up through the 30-band. The weekly 200-period MA support sits at $13.99 and 50-period MA resistance at $21.87. The weekly upper Bollinger Bands (BBs) sit at $23.43. The weekly market structure low (MSL) buy triggered a breakout above $17.06. The daily rifle chart uptrend is stalling with a flat 5-period MA at $18.89 and 50-period MA at $18.39 and a rising 15-period MA at $17.84. The daily stochastic formed a bearish mini inverse pup back down through the 80-band. The daily upper BBs sits at $20.76 and lower BBs sit at $13.87. Prudent investors can watch for opportunistic pullback levels at the $17.06 weekly MSL trigger, $16.69 fib, $15.48 fib, $13.68 fib, $12.78, $11.32 fib, and the $9.66 fib. Upside trajectories range from the $24.23 fib level to the $32.15 fib level.