Sunnova (NOVA) Stock Falls 30% as Company Files for Bankruptcy

Sunnova Energy (NOVA), a maker of residential solar panels, has filed for Chapter 11 bankruptcy protection in the U.S., news that has its share price down 30% on June 9.

The bankruptcy filing comes amid weak demand for residential solar panels throughout the U.S. and mounting debt levels. Sunnova filed for protection from its creditors in the Bankruptcy Court for the Southern District of Texas after warning in March that it might not be able to continue as a going concern.

The company listed $10 billion in assets and total debts of $10.67 billion, according to the court filing. Sunnova said last week that it would layoff about 55% of its workforce, approximately 718 employees, in a bid to cut costs and conserve cash.

Industry Woes

The bankruptcy filing comes at a time when the U.S. solar industry is under pressure from high interest rates, a reduction in incentives, and fears of subsidy rollbacks for clean energy projects. U.S. President Donald Trump’s administration is pushing to maximize oil and gas production and recently canceled a loan guarantee of $2.92 billion that was awarded to Sunnova by the Biden administration.

Last year, rival SunPower collapsed following an investigation by the U.S. Securities and Exchange Commission (SEC) into its accounting practices. Solar panel companies have warned that President Trump’s current budget bill could deal a massive blow to the industry by eliminating a generous subsidy for homeowners. NOVA stock has plunged 94% this year and currently trades at $0.22 per share.

Is NOVA Stock a Buy?

The stock of Sunnova has a consensus Hold rating among eight Wall Street analysts. That rating is based on eight Hold recommendations assigned in the past three months. The average NOVA price target of $0.70 implies 218% upside from current levels. These ratings are likely to change after the company’s bankruptcy filing.

Read more analyst ratings on NOVA stock