Emeren Group (SOL) AI Stock Analysis

• Market Cap: $67.23M
• Dividend Yield: N/A
• Average Volume (3M): 507.30K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.28
• Revenue Growth: -12.04%
• EPS Growth: -39.46%
• Country: US
• Employees: 197
• Sector: Technology
• Sector Strength: 57
• Industry: Solar
• EPS (TTM): -0.24
• Shares Outstanding: 51,321,620
• 10 Day Avg. Volume: 205,679
• 30 Day Avg. Volume: 507,296
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.91
• Price to Cash Flow (P/CF): -9.60
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.50
• Price Target Upside: 223.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

The overall stock score of 46 reflects significant challenges faced by Emeren Group. The company's declining revenues and profitability, along with weak technical indicators and a poor valuation, weigh heavily on the score. Despite some positive guidance and achievements highlighted in the earnings call, such as improved cash flow and strategic project monetization, these factors are not sufficient to offset the broader financial and operational difficulties.

Positive Factors

Earnings Outlook

Management remains optimistic about its revenue pipeline in 2025, and guided for over $50M in EBITDA for the year stemming from DSA and IPP segments alone.

Financial Performance

Gross margins improved to 43.8% from 31.2% in 2Q24 and 40.8% in 3Q23.

Revenue Potential

There is potential upside to the company's revenues, especially because of the DSA contracted backlog of $84M and an additional $100M under negotiations.

Negative Factors

Market Challenges

Emeren is navigating a choppy macro environment for solar project deployments, which is limiting the company's ability to deliver on its outlook in a consistent manner.

Revenue Decline

The company's 4Q24 revenues were lower than expectations due to delays in government approvals for several projects in Europe.

Revenue Outlook

The company lowered its revenue outlook for 2024 to $97-102M from $150-160M previously.

Emeren Group Business Overview & Revenue Model

Company Description

Emeren Group Ltd is solar project developer, owner, and operator. The Company specializes in solar project lifecycle, construction management, and financing services.

How the Company Makes Money

Emeren Group makes money through multiple revenue streams primarily centered around its solar energy projects. The company generates revenue by developing and selling solar power plants, offering EPC services to third parties, and providing long-term O&M services for solar installations. Additionally, Emeren Group may enter into power purchase agreements (PPAs) where it sells generated electricity directly to utilities or commercial customers. Significant partnerships with financial institutions, technology providers, and local governments can enhance project financing and execution, contributing to the company's earnings.

Emeren Group Financial Statement Overview

Summary

Emeren Group faces challenges with declining revenues and profitability, evident in the negative net profit margins and reduced revenue growth. While the balance sheet is robust with low leverage and a high equity ratio, the cash flow statement indicates significant issues in cash generation and management. Overall, the company needs to address operational inefficiencies and improve cash flow management to enhance financial performance.

Income Statement

The company has experienced a negative revenue growth rate of -12.7% in the TTM compared to the previous year, reflecting a decline in sales. The gross profit margin stands at 25.8%, showing a decent ability to manage production costs. However, the net profit margin is negative at -12.7%, indicating the company is not profitable. The EBIT margin is low at 0.6%, with the EBITDA margin slightly better at 7.2%, suggesting operational challenges.

Balance Sheet

The balance sheet shows a strong equity base with an equity ratio of 75.5%, indicating financial stability and low leverage. The debt-to-equity ratio is 0.12, suggesting a conservative approach to debt usage. Return on equity is negative at -3.5%, reflecting the unprofitability and inefficiency in using equity to generate income.

Cash Flow

The company has a negative free cash flow growth rate of -55.8% in the TTM, highlighting challenges in generating cash. Operating cash flow to net income ratio is -0.36, suggesting difficulties in converting net income into cash. The free cash flow to net income ratio is -1.29, further emphasizing cash flow constraints.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
92.07M	105.64M	81.41M	79.66M	73.92M
	Gross Profit
24.12M	25.01M	24.48M	31.42M	17.17M
	EBIT
-504.00K	-8.66M	7.47M	12.65M	2.33M
	EBITDA
-504.00K	7.13M	8.06M	19.92M	16.71M
	Net Income Common Stockholders
-11.61M	-3.19M	5.90M	6.86M	2.78M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	70.17M	107.11M	254.07M	40.59M
	Total Assets
0.00	478.35M	500.51M	529.27M	337.35M
	Total Debt
39.87M	60.83M	70.59M	57.85M	115.58M
	Net Debt
39.87M	-9.35M	-36.51M	-196.22M	74.99M
	Total Liabilities
109.55M	115.04M	100.99M	80.86M	153.62M
	Stockholders Equity
338.02M	325.31M	358.17M	404.01M	139.61M
Cash Flow		Free Cash Flow
-4.21M	-34.23M	-72.87M	-18.03M	-22.18M
	Operating Cash Flow
-4.21M	-23.49M	-35.25M	-6.42M	-13.93M
	Investing Cash Flow
-15.66M	15.31M	-37.06M	19.39M	510.00K
	Financing Cash Flow
-5.93M	-25.26M	-70.25M	204.88M	30.18M

Emeren Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.39
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOL, the sentiment is Neutral. The current price of 1.39 is above the 20-day moving average (MA) of 1.39, below the 50-day MA of 1.51, and below the 200-day MA of 1.90, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 48.89 is Neutral, neither overbought nor oversold. The STOCH value of 53.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SOL.

Emeren Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZEO	59 Neutral	$83.74M	―	-9.81%	―	―	-1707.68%
Sector *	59 Neutral	$10.74B	10.21	-6.69%	3.04%	7.44%	-10.92%
SOL	46 Neutral	$67.23M	―	-3.99%	―	-12.04%	-39.46%
TYGO	42 Neutral	$52.63M	―	-176.23%	―	-43.25%	-82.90%
SPWR	40 Underperform	$146.06M	―		―	65.91%	-23.44%
MAXN	33 Underperform	$54.28M	―	307.38%	―	-43.42%	-53.77%
SMXT	27 Underperform	$50.87M	―		―	-57.54%	-8091.75%

Emeren Group Corporate Events

Emeren Group CEO Transition and Financial Update

Emeren Group Ltd announced the resignation of CEO Yumin Liu, effective April 30, 2025, with Julia Xu stepping in as Interim CEO from May 1, 2025. The company is searching for a new CEO while Xu, a seasoned financial expert and former CFO of Emeren, will guide the company through this transition. Additionally, Emeren’s Board has formed a Special Committee to evaluate a going-private proposal received on March 17, 2025. The company also released preliminary Q1 2025 results, expecting revenue of approximately $8.4 million, a gross margin of 32%, and a non-GAAP operating loss of about $4 million, with final results anticipated in mid-May.