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I remember that the booking was 130+MW last quarter"218 MW Booked", when is the last time scty release their backlog?
If you accept SolarCity's retained value calculation (which covers NPV over a 30 year cash flow period), they get $1.72 per watt. They booked 218 MW in the quarter. This means they added $375 million in the quarter, or if we annualize this, $1.5 billion.
The market cap of the company is $6.8 billion.
I realize there are risks, i.e. competition and a declining government subsity (from 30% down to 10%?), but given the focus they have on owning the supply chain (similar to Tesla), does this valuation not grab you all as incredibly low?
I'm early on in my research, but I liked what I saw enough to invest following the Silevo acquisition. It seems to me this is a potential multi-bagger. DaveT, I liked your piece on how to get outsized returns. As a former sell side analyst I can assure you that what Dave wrote is exactly true. The Street focuses very short term, and I feel the short term nature of the market is exactly why we're able to sit back, take a long term focus, and earn better returns on growth companies.
When they say "booked 218 MW" does that mean that they intend to build that in the future, or they did indeed build 218 mw this past quarter?
booked means backlog.
"MW Booked" represents the aggregate megawatt production capacity of solar energy systems pursuant to customer contracts signed (with no contingencies remaining) during the applicable period net of cancellations during the applicable period. This metric includes solar energy systems booked under Energy Contracts as well as solar energy system direct sales.
"Backlog" represents the aggregate megawatt capacity of solar energy systems not yet deployed as of the date specified pursuant to Energy Contracts and contracts for solar energy system direct sales executed as of such date.
I don't see why this is such a great achievement- it means tons of demand but does that mean that they will be able to install all 218 MW? I'll have to go read their conference call but I don't get why you are so excited, FrozenCanuck.
If you accept SolarCity's retained value calculation (which covers NPV over a 30 year cash flow period), they get $1.72 per watt. They booked 218 MW in the quarter. This means they added $375 million in the quarter, or if we annualize this, $1.5 billion.
The market cap of the company is $6.8 billion.
Looking at some comments on this thread one would think SCTY's operating expenses are so high, given their "bloated corporate structure", that their bankruptcy is imminent. These seemingly deliberate vengeful remarks are truly appalling!
On the flip side though, I have some trouble equating Retained Value directly to Market Cap. Ideally growth in Retained Value should directly correspond to growth in Book Value (Shareholder Equity) as SolarCity puts all the contracts on the Assets side of the Balance Sheet. But that doesn't seem to be happening. I am not sure why. Do you have any insights into this?
They want to have 1 million customers by 2018. They've said this several times, and they most recently said they're on track to achieve it after adding 30,000 new customers to the backlog last quarter. They are going to need to ramp that 30k per quarter massively to hit the goal, but let's assume they do.
Ok - the retained value on contracts is not the same as retained earnings. The value should flow into earnings over a long time, at which point it lands on the balance sheet and you'll see it as asset / equity.
It seems reasonable to me to look at market cap as a direct function of retained value, provided you believe the value is real. The contracts that create this retained value should translate into actual earnings, right? And since they are already present value calculations, it's a simple way to look at discounted cash flow of current contracts.