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Emeren Group (SOL)
NYSE:SOL
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Emeren Group (SOL) AI Stock Analysis

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SOL

Emeren Group

(NYSE:SOL)

Rating:51Neutral
Price Target:
$2.00
▲(6.38% Upside)
The overall stock score is primarily influenced by the company's financial challenges, including declining revenues and cash flow issues. Technical indicators provide a neutral to slightly positive outlook, while valuation metrics highlight concerns due to negative profitability. The merger announcement offers a potential strategic upside, but the immediate impact of leadership changes and impairments tempers enthusiasm.
Positive Factors
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
Outlook
The company lowered its revenue outlook for 2024 to $97-102M from $150-160M previously.
Revenue Performance
The company's 4Q24 revenues were lower than expectations due to delays in government approvals for several projects in Europe.

Emeren Group (SOL) vs. SPDR S&P 500 ETF (SPY)

Emeren Group Business Overview & Revenue Model

Company DescriptionEmeren Group (SOL) is a global solar energy company focused on the development, construction, and operation of solar power projects. With a robust presence in various markets, Emeren specializes in providing clean energy solutions through its portfolio of utility-scale solar energy plants. The company's core offerings include solar project development, long-term asset management, and energy production services, catering to both residential and commercial clients seeking sustainable energy alternatives.
How the Company Makes MoneyEmeren Group generates revenue primarily through the sale of electricity generated from its solar power plants. The company enters into power purchase agreements (PPAs) with utility companies and large energy consumers, ensuring a steady income stream from long-term contracts. Additionally, Emeren earns revenue from the development and construction of solar projects, which includes upfront fees for project initiation and completion. The company's strategic partnerships with local governments and energy firms also facilitate access to financing and market opportunities, further enhancing its revenue potential. Furthermore, Emeren may benefit from government incentives and subsidies associated with renewable energy production, bolstering its financial performance.

Emeren Group Earnings Call Summary

Earnings Call Date:May 29, 2025
(Q4-2024)
|
% Change Since: 1.62%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlights a mixed performance. While there are strong points such as a significant increase in cash position, strategic project monetization, and expanding energy storage initiatives, there are also notable challenges including a year-over-year revenue decline, increased net loss, and project delays impacting revenue recognition.
Q4-2024 Updates
Positive Updates
Strong Cash Position
Ended the year with $50 million in cash, up 40% sequentially from $35.8 million in Q3 2024, reinforcing strong liquidity.
Significant Revenue Increase in Q4
Revenue surged 169% quarter by quarter, driven by successful project monetization.
Strategic Project Monetization
Successfully closed several strategic transactions in Europe, US, and China, solidifying leadership in renewable energy monetization.
Positive Operating Cash Flow
Generated $10.4 million in operating cash flow and over $5 million in free cash flow in Q4.
Expanding Energy Storage Initiatives
Executed a 462-megawatt DSA for battery energy storage systems in Italy.
Negative Updates
Revenue Decline Year Over Year
Delivered $34.6 million in revenue in Q4, down 23% year over year, primarily due to project delays pending government approvals.
Net Loss Increase
Net loss attributable to Emeren Group Ltd. common shareholders was $11.8 million, compared to a net loss of $2 million in Q4 2023.
Impact of Foreign Exchange Losses
Long operational foreign exchange losses contributed to the increase in net loss.
Challenges with Project Delays
Project sales timing delays impacted Q4 revenue recognition; expected projects remain on track to close in the first half of 2025.
Company Guidance
During Emeren Group, Ltd.'s Fourth Quarter 2024 earnings call, the company provided comprehensive guidance for 2025, highlighting several key metrics. Emeren anticipates full-year revenue to range between $80 and $100 million, with a gross margin of 30% to 33%. The Independent Power Producer (IPP) segment is expected to generate $28 to $30 million in revenue, maintaining a robust 50% gross margin. The Development Services Agreement (DSA) segment is projected to contribute $35 to $45 million, with IPP and DSA collectively accounting for over 70% of total revenue. Emeren also outlined a strong contracted revenue base, including $84 million in DSA revenue with an additional $100 million under negotiation. For the first half of 2025, revenue is predicted to be between $30 and $35 million, sustaining a gross margin of 30% to 33%. The company expressed confidence in achieving positive operating cash flow in 2025, supported by a substantial pipeline of 4.3 gigawatts in advanced-stage storage and 2.4 gigawatts of solar PV projects.

Emeren Group Financial Statement Overview

Summary
Emeren Group is facing significant financial challenges, with a negative revenue growth rate and unprofitable net profit margins. Despite a strong equity ratio and low leverage, cash flow constraints are evident with a negative free cash flow growth rate. The company must address operational inefficiencies and improve cash flow management.
Income Statement
45
Neutral
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
60
Neutral
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
38
Negative
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue92.07M105.64M81.41M79.66M73.92M
Gross Profit24.12M25.01M24.48M31.43M16.69M
EBITDA-686.00K7.13M7.35M19.92M15.87M
Net Income-12.48M-3.19M-4.67M6.86M2.78M
Balance Sheet
Total Assets447.57M478.35M500.51M529.27M337.35M
Cash, Cash Equivalents and Short-Term Investments50.01M70.17M107.11M254.07M40.59M
Total Debt63.39M60.83M70.59M57.85M115.58M
Total Liabilities109.55M115.04M100.99M80.86M153.62M
Stockholders Equity300.52M325.31M347.29M404.01M139.61M
Cash Flow
Free Cash Flow-20.04M-34.23M-72.87M-18.03M-22.18M
Operating Cash Flow-4.29M-23.49M-35.25M-6.42M-13.93M
Investing Cash Flow-15.47M15.31M-37.06M19.39M510.00K
Financing Cash Flow-5.85M-25.26M-60.28M204.88M30.18M

Emeren Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.88
Price Trends
50DMA
1.88
Positive
100DMA
1.68
Positive
200DMA
1.77
Positive
Market Momentum
MACD
<0.01
Positive
RSI
51.04
Neutral
STOCH
40.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOL, the sentiment is Positive. The current price of 1.88 is above the 20-day moving average (MA) of 1.88, above the 50-day MA of 1.88, and above the 200-day MA of 1.77, indicating a bullish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 51.04 is Neutral, neither overbought nor oversold. The STOCH value of 40.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOL.

Emeren Group Risk Analysis

Emeren Group disclosed 44 risk factors in its most recent earnings report. Emeren Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Emeren Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$35.38B6.84-10.82%1.97%8.74%-8.28%
51
Neutral
$95.97M-1.27%-33.25%81.55%
48
Neutral
$84.80M-221.18%52.31%-2421.56%
44
Neutral
$65.05M307.38%-54.68%63.56%
42
Neutral
$115.70M-9.81%86.59%55.95%
41
Neutral
$59.19M
-27.65%16.39%
40
Underperform
$137.13M
308.47%76.84%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SOL
Emeren Group
1.88
-0.09
-4.57%
MAXN
Maxeon Solar Technologies
3.92
-13.78
-77.85%
SPWR
Complete Solaria
1.59
-0.29
-15.43%
TYGO
Tigo Energy
1.24
0.03
2.48%
ZEO
Zeo Energy
1.95
-0.60
-23.53%
SMXT
SolarMax Technology, Inc.
1.20
-1.86
-60.78%

Emeren Group Corporate Events

Executive/Board ChangesFinancial Disclosures
Emeren Group Appoints New EVP for North America
Negative
Jul 8, 2025

Emeren Group announced a leadership change in its North American operations with the resignation of Cameron ‘Mac’ Moore as Executive Vice President, effective July 3, 2025, and the appointment of M. Jahangir Alam as his successor. Alam, a seasoned leader in the North American renewable energy industry, brings extensive experience in executive leadership, finance, and M&A. Additionally, Emeren provided preliminary financial updates for Q2 2025, expecting a non-cash impairment of at least $20 million on global property, plant, and equipment due to an updated fair value assessment of certain power station assets.

Delistings and Listing ChangesM&A Transactions
Emeren Group Announces Merger with Shurya Vitra
Positive
Jun 20, 2025

On June 18, 2025, Emeren Group Ltd entered into a definitive Agreement and Plan of Merger with Shurya Vitra Ltd. and its subsidiary, Emeren Holdings Ltd., to become a wholly-owned subsidiary of Shurya Vitra. The merger, expected to close in the third quarter of 2025, will result in Emeren’s shares being de-listed from the New York Stock Exchange, transitioning the company to a privately held entity. This strategic move is aimed at enhancing Emeren’s operational capabilities and market positioning, with the board of directors and a special committee endorsing the merger as beneficial for shareholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 22, 2025