MAXN stock is still a pass, Roth says

Following the release of preliminary fourth quarter numbers, Roth MKM analyst has maintained his “Neutral” rating on Maxeon Solar Technologies (Maxeon Solar Technologies Stock Quote, Chart, News, Analysts, Financials NASDAQ:MAXN).

On April 9, MAXN pre-announced its fourth quarter results. In the quarter, the company posted Adjusted EBITDA of negative $35-million on revenue of $229-million.

“In the fourth quarter, Maxeon delivered financial results largely in line with our expectations,” CEO Bill Mulligan said. “Our U.S utility-scale business accounted for the majority of revenues in the fourth quarter, with stable ASPs.As disclosed in our last earnings call, Maxeon has been executing a transformation of our IBC capacity timed to coincide with the current DG market slowdown. As part of this initiative, we made the decision to ramp down all of our Maxeon 6 capacity faster than we had originally expected, resulting in higher than initially planned restructuring costs in the fourth quarter. The Maxeon team is highly focused on reducing manufacturing costs, OPEX rationalization and liquidity-management to enable a return to profitability. Our strategy continues to be to focus on designing and building premium, differentiated products and delivering a superior customer experience across a balanced portfolio of global DG and U.S. utility scale markets. The Company plans to file its annual 20-F report by April 30, 2024.”

The analyst commented on the development.

“Investors have been wondering why MAXN is taking so long to report Q4,” he wrote. “We believe management may have preannounced Q4 to frame the quarter and Q1. There was significant restructuring activity related to the accelerated ramp down of Maxeon 6 capacity, but the company is focused on reducing manufacturing costs, opex rationalization, and liquidity management. Overall, Q4 numbers were inline with guidance, but the Q1 guide came in weak. We expect MAXN to host its call later this month.”

In a research update to clients April 9, Shen maintained his “Neutral” rating and price target of $3.00 on MAXN.

The analyst thinks MAXN will post EBITDA of negative $60.7-million on revenue if $979.9-million in fiscal 2024.