SolarCity Corp Stock Price Target Upgraded

Baird’s research note on SolarCity Corp stock after 2Q earnings report

Business Finance News reviews Baird’s research note on SolarCity Corp stock after 2Q earnings report.

SolarCity Corp. (NASDAQ:SCTY) published its second quarter earnings report for the fiscal year 2015 on July 29, beating the Street massively on revenues by $12.6 million, recording $102.8 million; in turn, registering colossal growth of well over 67%. Despite the beat, shares for SolarCity are treading on a downwards trajectory, falling by 0.93% as at 11:21 AM EDT.

However, it is interesting to note that regardless of the falling share price, Baird analyst Ben Kallo has increased the 12-month price target estimate to $73 from the previous estimate of $71. We believe that the stance by Mr. Kallo is explained, as falling stock price presents an excellent Buy opportunity, as future growth is anticipated with consumer bookings expected to increase.

In the research note, we notice that SolarCity bookings have increased by 81% Year-over-Year (YoY) in the second quarter; we believe this trend to carry on in the future as the masses are educated on the upside of using renewable energy; this coupled with the increased investment will surely take the stock further.

Apart from what Mr. Kallo believes to be traction points for SolarCity’s future growth, we believe that financing facility available to its customers is a great selling point to attract a greater consumer base.

Stock Price Movement

SolarCity stock is currently trading at $57.78, down by 0.47% as at 11:48 AM EDT, the stock opened at $59.76. The 12-month consensus price target of $84 per share, which registers a massive potential upside of 45.3% on the current share price, further supports our claim of lower share price projecting an excellent buy opportunity.

Analysts Rating

We notice the same bullish stance as analysts on the Street are leaning greatly towards a Buy rating; 12 out of 15 analysts polled by Bloomberg suggest a Buy rating, whereas just two analysts rate the stock as a Hold and merely one analyst tags the stock as a Sell.

We have studied investments from Netflix, new contracts signed by Orbital, SolarCity earnings report and their negotiation with Tesla for the acquisition of the Powerball battery, the problems that ARCH coal is facing, how IBM is investing in the treatment of the Zika virus, how Moon Express is planning to mine minerals in the moon, and how Citigroup is engaged in commodity trading.

We follow a lot Tesla here, from the fundamental analysis and from the technical as well. See how the Chevy Bolt and the Tesla 3 are dimensioning the evolution of the price of this shares and how this could affect technical analysis, and how the Autopilot functionality is working: the evolution of the Autopilot software has always influenced the prices of their stocks. Tesla Model S 70D is considered the “car of the century”, not by us of course, but we are interested to see how these awards affect the evolution of the stocks. Tesla and other companies signed an agreement so that autobraking became the standard in 2022. A trend in the automobile industry started by Mercedes Benz and Tesla, is having a platform to sell pre-owned vehicles: now General Motors is joining that trend as well.

We have studies how the stock slump of GoPro should be considered not only from the view of technical analysis. Also, check the functionality from Facebook, the “login approval” and if it really protects users or other interests. The reports from Volkswagen about their very low injury claims, how now other companies in China can use the name “IPhone” apart from Apple. We continue in China to learn about the Marketplace Alliance Program from Alibaba, and the joint investment in CloudFlare from Google Inc, Microsoft Corporation, Qualcomm, and Baidu.

About Google, a company we follow a lot here, I want to see how they have entered in the batteries market and how this will affect their current projects and the evolution of the stocks. Interesting are the Chrome updates to decrease CPU usage.

We analyze the effects of the position of Disney in the dispute between Netflix and Time Warner, so we can understand how Disney is shifting its business after selling its stake in Fusion.

We discuss briefly how Oracle adressed the changes in the cloud-computing industry, why Morgan Stanley is optimistic after the pandemic and the Brexit, the divestment in Dell regarding Perot Systems, and the effects of the huge minimum wage rise in Costco. Chipotle is cutting the executive compensation, the issues that BP is facing, what happens with Macy´s earnings and how fundamental analysis can be done in those cases. About Apple, we analyze the effect of the launch of this product Apple Watch where sales performed very irregularly.