SOL stock is still a buy, Roth says

Its third quarter results are in the books and Roth MKM analyst Philip Shen still thinks there is money to be made on Emeren Group (Emeren Group Stock Quote, Chart, News, Analysts, Financials NYSE:SOL), if only a little less so.

On November 21, SOL reported its Q3, 2023 results. The company posted EBITDA of negative $6.8-million on revenue of $13.9-million, a topline that was down from $28.9-million in the same period a year prior.

The analyst said the company is facing short-term headwinds.

“SOL delivered a Q3 revenue miss, but higher-than-expected margins,” he wrote. “The company is growing its IPP assets and making progress on existing and advanced-stage solar and storage pipelines. Near term, Q3 and Q4 expectations are a bit challenged, but during this time of inflection with rapid
reductions in input costs, such as modules and batteries, there may be attractive, profitable opportunities through 2024. PPAs are down to levels seen three-to-four years ago, while capex remains comparatively lower.”

In a research update to clients November 21, Shen maintained his “Buy” rating on SOL, but lowered his price target on the stock from $7.00 to $5.00.

The analyst thinks SOL will post EBITDA of $10.7-million on revenue of $112.2-million in fiscal 2023. He expects those numbers will improve to EBITDA of $27.6-million on a topline of $149.8-million the following year.