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Given that SCTY is a recent IPO, it has limited 200-day-moving-average history. It only spans last two ERs actually.
ER Date Price 200-day-MA %Away %Fall Next Day
3/18/14 77.10 51.20 50 -5.71%
11/6/13 59.65 32.65 82 -16.70%
So you might be right, given that now the stock is literally around the 200-day-ma, it may not fall as much or may even go up on ER.
I haven't paid much attention to EPS numbers in the past as I thought they are sort of irrelavent. As I take a close look now, the ship has already turned!!
These are the GAAP numbers (including some restatements):
Q4 13 -> 0.280
Q3 13 -> 0.040
Q2 13 -> -0.310
Q1 13 -> -0.410
Q4 12 -> -1.300
Here is the real kicker: analysts are expecting -0.629 eps for Q1 14. LOL!
Now I'm feeling very positive about ER actually.
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I agree with the gist of this. I look at Retained Value and Retained Value/Watt to get a feel for the trends. I don't think of them in absolutes.
Lets say we agree that SCTY's retained value is in reality only half as worth as they say it is. All it means is that it will take an extra year to grow into their number (or any future target number), as they are growing at 100%+ rate. For a long term investor that should not be too much of a big deal.
Another key related point, I don't think we should look at Retained Vale as company's true worth or some sort of proxy for the company's fair value. It's a confusing/messedup metric. I know it takes out tax equity partner's shares but I'm not sure if it takes out monetisation through debt. This is the reason why I like to look at Book Value (with a reasonable multiple) as a better proxy for fair value.
Having said that SCTY assumes 90% renewal rate for the later 10years. Not sure what they assume for the remaining 10% - a complete write off?
Here is a blob from the footnotes in one of the quarterly presentation:
“Retained Value Renewal” represents the forecasted net present value of the payments SolarCity would receive upon Energy Contract renewal through a total term of 30 years, assuming all Energy Contracts are renewed at a rate equal to 90% of the contractual rate in effect at expiration of the initial term. This metric is net of estimated operations and maintenance, insurance, administrative and inverter replacement costs. This metric includes Energy Contracts for solar energy systems deployed and in Backlog.
These are the GAAP numbers (including some restatements):
Q4 13 -> 0.280
Q3 13 -> 0.040
Q2 13 -> -0.310
Q1 13 -> -0.410
Q4 12 -> -1.300
Here is the real kicker: analysts are expecting -0.629 eps for Q1 14. LOL!
Now I'm feeling very positive about ER actually.
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I agree with the gist of this. I look at Retained Value and Retained Value/Watt to get a feel for the trends. I don't think of them in absolutes.
Lets say we agree that SCTY's retained value is in reality only half as worth as they say it is. All it means is that it will take an extra year to grow into their number (or any future target number), as they are growing at 100%+ rate. For a long term investor that should not be too much of a big deal.
Another key related point, I don't think we should look at Retained Vale as company's true worth or some sort of proxy for the company's fair value. It's a confusing/messedup metric. I know it takes out tax equity partner's shares but I'm not sure if it takes out monetisation through debt. This is the reason why I like to look at Book Value (with a reasonable multiple) as a better proxy for fair value.
Having said that SCTY assumes 90% renewal rate for the later 10years. Not sure what they assume for the remaining 10% - a complete write off?
Here is a blob from the footnotes in one of the quarterly presentation:
“Retained Value Renewal” represents the forecasted net present value of the payments SolarCity would receive upon Energy Contract renewal through a total term of 30 years, assuming all Energy Contracts are renewed at a rate equal to 90% of the contractual rate in effect at expiration of the initial term. This metric is net of estimated operations and maintenance, insurance, administrative and inverter replacement costs. This metric includes Energy Contracts for solar energy systems deployed and in Backlog.
HenryF, Retained value will ultimately give way to traditional metrics as they hit break even and begin to self finance... Since this is a business currently expanding at 100% compounded, there needs to be a way to express the end result value to investors while they're getting to this point. The npv is that expressed way. If they didn't show the future value of returns on intensive capital now, they would be just another installer, growth would be severely slowed. The retained value has been extremely helpful in raising billions of dollars for Solarcity.
To me, using my systems engineering brain, it is just like the millions of projects that go on around the world where you finance the construction using simple npv. Analysis/ break even analysis, etc...
update: and if some people out there think Solarcity hasn't done the sensitivity analysis on assumptions such as discount rate, etc... those people are very misinformed and need to pay attention a little more in detail to the management running this thing...
dont forget Elon has been 100% behind this analysis from day one... Check out what he said on IPO day...
Musk: SolarCity IPO Price Sought Wasn't Aggressive
To me, using my systems engineering brain, it is just like the millions of projects that go on around the world where you finance the construction using simple npv. Analysis/ break even analysis, etc...
update: and if some people out there think Solarcity hasn't done the sensitivity analysis on assumptions such as discount rate, etc... those people are very misinformed and need to pay attention a little more in detail to the management running this thing...
dont forget Elon has been 100% behind this analysis from day one... Check out what he said on IPO day...
Musk: SolarCity IPO Price Sought Wasn't Aggressive
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nope- there's no specific Solar news to drive it. 10% down across the Solar board- good buy-op here. It's basically a risk off- US econ data coming this week and Ukraine. IMO a big market miss as usual. I'm currently adding to position
credit suisse downgraded chinese solar demand, so chinese solar companies are getting pummeled:
Credit Suisse Lowers China Solar Demand And Yingli Green Energy TP - Emerging Markets Daily - Barrons.com
SolarCity Announces Date and Conference Call Details for First Quarter 2014 Earnings Report - Yahoo Finance
this could get fun since Tesla's conf call will start a half an hour into solarcity's call!!
this could get fun since Tesla's conf call will start a half an hour into solarcity's call!!
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Here is the deal on SCTY's stock price.
Elon Musk bought 214,869 shares and Lyndon Rive bought 107,434 shares at a price of $46.54 per share in Oct 2013, in the secondary offering.
Most definitively, these two guys know of the company's prospects and vision than anyone else on the planet.
Media reports Elon Musk as a Billionaire and thus giving the impression he is very rich. That is all very true. But the other truth of the matter is, he doesn't hold much cash. In fact he has personal loans north of $300 million with Goldman Sachs etc. So any sizeable purchases he makes are all on borrowed money.
I vividly remember during the secondary, Musk basically said "I will invest this amount regardless of the price, just give me whatever shares I can get." I'm unable to find a link at the moment but will post once I have it.
The way I read that is "I can only afford to spend this much at this time. Whatever price you financial nuts come up with in the primary market, that will be way lower than the true potential of this company. So just give me whatever number of shares you think is right."
Elon Musk is a person with the highest business acumen of our times and quite possibly of all time. I often tell my friends that Musk will beat Rockefeller in becoming the richest person world has ever seen. Now we see this man, going on credit and buying the stock without regard to price.
What does all that tell about the price of $46.54?
After ER (or any other time), if stock drops close to $46.54, I will buy the stock like a mad man. I honestly think I would be stupid not to. It can always go lower esp if there is an imminent recession or some abnormal event. But I think the current price or any lower price for this stock is a real bargain.
Elon Musk bought 214,869 shares and Lyndon Rive bought 107,434 shares at a price of $46.54 per share in Oct 2013, in the secondary offering.
Most definitively, these two guys know of the company's prospects and vision than anyone else on the planet.
Media reports Elon Musk as a Billionaire and thus giving the impression he is very rich. That is all very true. But the other truth of the matter is, he doesn't hold much cash. In fact he has personal loans north of $300 million with Goldman Sachs etc. So any sizeable purchases he makes are all on borrowed money.
I vividly remember during the secondary, Musk basically said "I will invest this amount regardless of the price, just give me whatever shares I can get." I'm unable to find a link at the moment but will post once I have it.
The way I read that is "I can only afford to spend this much at this time. Whatever price you financial nuts come up with in the primary market, that will be way lower than the true potential of this company. So just give me whatever number of shares you think is right."
Elon Musk is a person with the highest business acumen of our times and quite possibly of all time. I often tell my friends that Musk will beat Rockefeller in becoming the richest person world has ever seen. Now we see this man, going on credit and buying the stock without regard to price.
What does all that tell about the price of $46.54?
After ER (or any other time), if stock drops close to $46.54, I will buy the stock like a mad man. I honestly think I would be stupid not to. It can always go lower esp if there is an imminent recession or some abnormal event. But I think the current price or any lower price for this stock is a real bargain.
HenryF, to add, that purchase was made over six months ago... A lot has changed since then, big milestones achieved, and many more coming soon...
not much company direct news put out since last ER, so to me, pure technicals at play in current stock price. Seems to me players are just shuffling money in and out of the sector and between companies at advantageous times. When big news comes out of tesla and Solarcity, big swings up will occur... These coming months are filled with big news events, just thing what the finalized gigafactory is going to do to things... Add in any slight bit of govt investigation results, or battery storage install news in Cali, etc... Ii do have my pie in the sky high prices, but I do feel that prices won't go too much lower ever again soon. (Barring any truly material breach). They just have the right mix in the right states at the right time with the right future strategy/corporate culture... Everything I want to see in an investment in good times and in bad, in the best of markets and the worst...
not much company direct news put out since last ER, so to me, pure technicals at play in current stock price. Seems to me players are just shuffling money in and out of the sector and between companies at advantageous times. When big news comes out of tesla and Solarcity, big swings up will occur... These coming months are filled with big news events, just thing what the finalized gigafactory is going to do to things... Add in any slight bit of govt investigation results, or battery storage install news in Cali, etc... Ii do have my pie in the sky high prices, but I do feel that prices won't go too much lower ever again soon. (Barring any truly material breach). They just have the right mix in the right states at the right time with the right future strategy/corporate culture... Everything I want to see in an investment in good times and in bad, in the best of markets and the worst...
I made a point in one of my posted to state SCTY is recession-proof in my opinion. Everyone needs electricity and needs to save money during a recession. How could a recession possibly hurt this company? During a recession people may not want stocks but they'll buy SCTY ABS at a fixed rate with little risk. The capital should be easy to get in good times and bad. I just don't see how this company can do poorly during a recession. I really don't understand the market volatility either, other than pure manipulation. This is one of those stocks I just wish the shorts would leave alone so long term investors will buy and hold.
Personally, I would love to see Elon buy the dips and sell the highs. He would be doing his stockholders a huge favor. He can calm the stock down a lot by announcing his insider trades. He owns so much of the stock he can really help set the price and keep things more stable.
Personally, I would love to see Elon buy the dips and sell the highs. He would be doing his stockholders a huge favor. He can calm the stock down a lot by announcing his insider trades. He owns so much of the stock he can really help set the price and keep things more stable.
I said this before: SCTY will not do well in a recession and the stock will tank even more all the way to the teens if a recession started in the next few months.
You guys are going out of your ways to spin a huge negative into a positive/neutral in regards to SCTY.
First of all, SCTY will not be able to issue ABS easily, if at all, in a recession and a bear market.
Here is an example of what could happen in a recession:
States (not named California who put in net metering rules for 20 years) begin to struggle financially even more than before, so they take away net metering rules (this can happen in a bull market and is happening in some states like Colorado or Arizona).
Without net metering customers are losing money big time on SCTY leases, so they stop paying their bills. SCTY issued ABS's begin to implode and so does the company's stock.
Now, I am not saying that this will happen, but it is a realistic possibility and you wrote "I just don't see how this company can do poorly during a recession."
Another more simple example is that people lose jobs and stop paying for the solar lease, because they don't believe that SCTY will cut them off. Or they can simply play the "wellfare" card to get free/subsidized electricity from the utility instead having to pay SCTY.
There are many things that will go wrong for SCTY in a recession. If the recession is severe, such as in 2008 then you might be seeing SCTY trade below its IPO price. Make no mistake, all other solar stocks will get hit really hard too but SCTY would get hit just as hard if not a lot harder IMO.
You probably picked the absolute most negative scenario imaginable for SCTY. What you describe would be a depression, not a recession. People buy bonds and secure investments during recessions and the SCTY ABS would be quite attractive at 5% during a low inflation environment. That settles the ABS problem during a recession.
People pay their electricity bills before they pay their mortgages. They also pay their credit card bills/utilities/car loans before making the mortgage. A person is not going to stop paying a lease on electricity just as they don't stop paying the electric bill. Sure, anyone without a job might not pay. You don't need a recession in order to find people without jobs. The number of people not paying due to job loss will be much smaller than the number of people signing up for a lease to save money. Saving money is easier than spending it when you're in a tough spot.
The government may continue the rebates if the economy slows. You seem to forget the Fed is pumping money into the economy and swears to continue in the event of a recession. Financing solar panels is going to be a long term certainty regardless of economic health.
People pay their electricity bills before they pay their mortgages. They also pay their credit card bills/utilities/car loans before making the mortgage. A person is not going to stop paying a lease on electricity just as they don't stop paying the electric bill. Sure, anyone without a job might not pay. You don't need a recession in order to find people without jobs. The number of people not paying due to job loss will be much smaller than the number of people signing up for a lease to save money. Saving money is easier than spending it when you're in a tough spot.
The government may continue the rebates if the economy slows. You seem to forget the Fed is pumping money into the economy and swears to continue in the event of a recession. Financing solar panels is going to be a long term certainty regardless of economic health.
Thats a thought, but iit seems that when he, and everyone else, accumulates and holds for the long term, all long term investors win. The volatility happens but at the end of the annual production cycle, the stock should a lot higher then at the beginning(barring any material breach of course.)
we should get a good snap shot after the q1 conf call and q2 guidance(and reaffirmation of YE guidance).
The instability of the stock stops a lot of people from investing in the first place. If it was rising and falling a lot more smoothly then a lot more investors would hold on. People do not like all this crazy volatility. 50% swings is crazy. I can deal with 25% swings easily, as can most "investors". Too many traders in the stock and way too many shorts. He's letting the shorts control the stock more than they ought to.
I hear you, swings are crazy. I think it will all pan out in the end. Have to remember it was in the teens at the beginning of 2013. At the beginning of 2014 in the fifties. And in my opinion, closing in on the 100's at the beginning of 2015. I feel they will set somewhere in between 900MWs-1GW goal for YE 2015, RV between $3-4bln.
with growth like that, tough to see investors run away...
Tesla Power Light | EnergyBiz
this is a recent JB interview on Solarcity/tesla energy storage. Although it could be shorter variation on this article from a few weeks ago... Tesla’s Power Play | EnergyBiz
JB STRAUBEL: "Our long-term goal is to invent ways to solve storage problems to facilitate a 100 percent renewable grid. That shouldn’t threaten utilities. It's the logical and future evolution of the grid. Utilities have a key part in this. Our role is to invent and improve the products that make a 100 percent renewable grid possible."
All in all, I think we will see more of the tesla/Solarcity energy storage narrative in the coming weeks and throughout the second half of the year...
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We Are SolarCity - YouTube
Saw this video, I'm wondering if Solarcity is approaching 2 residential installs per day now... Also read a tweet from a Solarcity installer he finished installing a 7kw system by noon... My own little back of the envelop number says Solarcity average system size is about 6.8kws so could be a possibility. Last reported by Bob Kelly in March was an improvement from .4 installs/day to .9/day... So getting to 2/day would be a big milestone in such a short amount of time... I wonder what the competition rate of install is?
Is the zep aquisition paying off? This is a video on how zep mount works...
ZS Comp Overview on Vimeo
Mounting Market Will Grow $1.5 Billion By 2018
solar mounting will grow $1.5bln by 2018...
Saw this video, I'm wondering if Solarcity is approaching 2 residential installs per day now... Also read a tweet from a Solarcity installer he finished installing a 7kw system by noon... My own little back of the envelop number says Solarcity average system size is about 6.8kws so could be a possibility. Last reported by Bob Kelly in March was an improvement from .4 installs/day to .9/day... So getting to 2/day would be a big milestone in such a short amount of time... I wonder what the competition rate of install is?
Is the zep aquisition paying off? This is a video on how zep mount works...
ZS Comp Overview on Vimeo
Mounting Market Will Grow $1.5 Billion By 2018
solar mounting will grow $1.5bln by 2018...
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