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