It is a dark day when an analyst says that your company’s equity no longer has any value. And that’s just what happened to SunPower (SPWR), the solar stock that may be about to collapse. Analysts came out strongly against it, and investors abandoned ship, sending shares down over 48% in Friday afternoon’s trading. The bloodbath started yesterday but continued well into today at such a fever pitch that it was basically more like a blood typhoon. That was when Guggenheim analysts Hilary Cauley and Joseph Osha came out and delivered what probably should have been a death blow.
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In fact, they declared, “We think this effectively marks the end for SPWR as an operating business. Considering the debt that the company has accumulated, we believe that SPWR’s equity no longer has any value.”
Guggenheim then put its price target where its mouth was, cutting the price target down to $0 from the $1 it was previously, effectively declaring the company worthless. SunPower, meanwhile, declared only recently that it was no longer supporting any new leases, installations, or product shipments, which is enough to make one wonder where any kind of operating income will come from.
It’s worth noting that Joseph Osha is a five-star analyst who has enjoyed a 54% success rate on his ratings, with an average return of 21.9% per rating.
Is There Hope for Tomorrow?
Reports note that SunPower is currently looking for new providers to transfer projects that have already been sold to customers. There is also some hope that SunPower could get bought out by another operation, which could happen for a comparative pittance, particularly if the new owner could convince creditors to take reduced or delayed payment.
Meanwhile, with work halted, other analysts are circling the corpse-to-be. Roth analyst Philip Shen declared the company had possibly “hit a wall,” and BloombergNEF analyst Pol Lezcano noted that the firm is basically not able to continue operating. And GLJ Research cut its price target, just like Guggenheim did, down to $0.
Is SunPower Stock a Good Buy?
Overall, analysts have a Moderate Sell consensus rating on SPWR stock based on five Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 93.17% loss in its share price over the past year, the average SPWR price target of $3.01 per share implies 293.46% upside potential.
