SPWR/Batman – The reaction is a little harsh, I think.
SunPower (NASDAQ:SPWR): Q4 Non-GAAP EPS of $0.23 in-line; GAAP EPS of $0.03 beats by $0.15.
Revenue of $607M (+15.5% Y/Y) misses by $7.98M.
SunPower (NASDAQ:SPWR) -5.8% after-hours after slightly missing expectations for both Q4 earnings and revenues and issuing in-line guidance for FY 2020 revenues.
Q4 residential revenue rose to a record with 27% MW growth vs. the year-ago quarter, and global shipment volumes gained more than 80% Y/Y to a record.
SunPower sees full-year revenues of $2.1B-$2.3B vs. $2.28B analyst consensus estimate; for Q1, the company forecasts revenues of $435M-$470M vs. $409M consensus, as well as gross margin of 9%-12%, adjusted EBITDA flat to negative 15M and MW deployed of 520-570 MW.
As a result of the restructuring of its commercial direct business, SunPower forecasts FY 2020 adjusted EBITDA of $125M-$175M.
SPWR is at $1.5Bn at $9 so 10x 2020 earnings is not something I'd throw away. Not every company is like TSLA and fudges the books to make every quarter look great. If SPWR thought they'd deliver a $20M project ($500M/qtr in sales) by Dec 31st and it got delayed until Jan 15th – then they take a sales hit but it doesn't impact their long-term growth trends.
| Year End 30th Dec | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | TTM | 2019E | 2020E | CAGR / Avg |
|---|---|---|---|---|---|---|---|---|---|---|
|
$m
|
2,507 | 3,027 | 1,576 | 2,553 | 1,794 | 1,726 | 1,717 | 2,010 | 2,257 | -7.19% |
|
$m
|
159 | 251 | -206 | -372 | -1,025 | -849 | -256 | |||
|
$m
|
95.6 | 246 | -187 | -449 | -929 | -811 | -141 | -45.0 | 22.9 | |
|
$
|
0.688 | 1.55 | -1.39 | -3.25 | -4.49 | -5.76 | -1.13 | |||
|
$
|
0.701 | 1.62 | -1.36 | -2.57 | -1.48 | -3.15 | -1.10 | -0.307 | 0.140 | |
|
%
|
+131 | |||||||||
|
x
|
78.1 | |||||||||
|
|
0.514 | |||||||||
| Profitability | ||||||||||
SPWR split back in 2015, it's not like they lost revenues, they pursued a different path and have been growing well since reorganizing in 2017 and they remain on track. It's not a company we expect to take off like a rocket – just one we'd like to own for many years as they grow. That's why we only sold 2022 $8 puts (for $3.10) in the Money Talk Portfolio – the net $4.90 entry is all we were looking for.
Since we can get $2.50 now for the 2022 $8 puts and since that's pretty much free money, let's sell 10 in the Future is Now Porfolio ($2,500) and, for the LTP, let's:
- Sell 20 SPWR 2022 $8 puts for $2.50 ($5,000)
- Buy 40 SPWR 2022 5 calls for $5.15 ($20,600)
- Sell 40 SPWR 2022 $12 calls for $2.40 ($9,600)
That's net $6,000 on the $28,000 spread that's $16,000 in the money to start with $22,000 (366%) upside potential at $12 in two years. I don't mind waiting for that and our worst case is owning 2,000 shares at net $22,000 or $11/share so even if SPWR is down at $5, if we bought 2,000 more for $10,000 our average would be $8 (less than it is now) for 4,000 shares and we could sell $5 puts and calls to drop our basis. I would almost prefer that to making the $16,000!
Wow, I did not think we'd be able to reload at the same prices but…
I'm going short on /NQ (2) at 9,615 and 2 /RTY at 1,690 and I'll add 2 more if they go higher but also looking for 2 more short /ES at 3,380 – these are for the weekend, but so was yesterday but then they make $10K so screw that!
