What’s Behind SunPower Stock’s 4x Growth Since 2018?

+86.06%
Upside
15.21
Market
28.30
Trefis
SPWR: Sunpower logo
SPWR
Sunpower

SunPower Corporation (NASDAQ: SPWR) stock price rose more than 4x from $4 in 2018 end to over $17 currently, primarily due to favorable changes in its P/S multiple. During this period, the company did witness a slight rise in revenues, but a substantial rise in the outstanding share count weighed on the company’s revenue per share. Further, over the same period, the S&P 500 has returned around 70%, meaning that SPWR stock massively outperformed the broader markets.

In our interactive dashboard, Why SunPower Stock Moved: SPWR Stock Has Gained 319% Since 2018, we break down the factors behind this move.

(A) SPWR’s Total Revenue has grown 10% from $1.2 billion in 2018 to over $1.3 billion on an LTM basis

  • SPWR’s total revenue initially fell from $1.2 billion in 2018 to $1.1 billion in both 2019 and 2020, before pulling up to $1.3 billion in FY ’21, and currently stands at around the same level.
  • SPWR sells, installs, and finances solar power products, such as panels, batteries, mounting hardware, and monitoring software.
  • The Residential and Light commercial segment makes up almost 85% of the company’s sales as of FY ’21, bringing in $1.12 billion for the company.
  • For additional details about SPWR revenues and comparison to peers, see SunPower (SPWR) Revenue Comparison
Relevant Articles
  1. Forecast Of The Day: Average Revenue Per Toyota Vehicle
  2. Company Of The Day: Beyond Meat
  3. Why Has F5 Networks Stock Underperformed The S&P Since 2019?
  4. Bank of America Stock Has Lost 21% YTD, Is It A Buy?
  5. What’s New With Zynga Stock?
  6. At $350, There’s Upside For Shopify Stock

(B) Revenue per share (RPS) decreased 16% from $8.54 in 2018 to $7.21 currently

  • SPWR revenue rose from $1.2 billion in 2018 to $1.3 billion currently, while the outstanding share count increased at a faster rate from 140.8 million in 2018 to almost 184 million currently.
  • Due to this, RPS has dropped from $8.54 in FY ’18 to $7.21 currently.

(C) Price-To-Sales (P/S) multiple for SunPower rose strongly from 0.6x in 2018 to 4x by 2020 end but has pulled back to 2.4x currently, still 4x higher than its 2018 level

  • Despite SunPower’s stagnant sales growth between 2018-end to 2021, its P/S multiple rose strongly from 0.6x in 2018 to as high as 4x in late-2020, on the back of rising investor expectations surrounding strong solar products demand growth.
  • However, due to current geopolitical tensions and increased uncertainty in the broader markets, the P/S multiple has pulled back substantially, currently standing at around 2.4x.
  • For additional details about the company stock returns and comparison to peers, see SunPower (SPWR) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Apr 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 SPWR Return -23% -21% 202%
 S&P 500 Return -10% -15% 81%
 Trefis Multi-Strategy Portfolio -8% -15% 234%

[1] Month-to-date and year-to-date as of 4/29/2022
[2] Cumulative total returns since the end of 2016

 

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates