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SolarCity’s value proposition to bullish investors rests on the following argument: the transformation of the company from a PV manufacturer to a distributer of solar power. No longer will margins be tied to the cyclical nature of supply/demand plaguing manufacturers; with only 9% of first-half 2013 new U.S. generation capacity coming from distributed solar, the energy markets are their oyster: With approximately 377,000 GWh of retail electricity currently sold in the United States per year at a price averaging at or above the company’s current blended electricity price of $0.141/kWh, the implied annual U.S. market for PV electricity priced at or above $0.141/kWh is $63 billion! Unfortunately, there are some glaring weaknesses lurking in this PV retail distribution model, including the following: attractive margins of 66% will likely attract more competitors, including First Solar and traditional utilities (all of whom have greater capital resources); three states, California, Arizona, and Colorado account for 90% of portfolio lease revenue; though historic default rates have historically run lower than even car loans (loss rate of about 2.2%), a repeat of the housing debacle of 2008 could adversely affect cash flows; and, legislative lobbying by traditional electric companies could limit returns - should SolarCity be viewed as an “energy utility,” profitability could be constrained (regulated) like its new peers.
Innovative management coupled with TSLA technology.
Wholly dependent on govt largess......."If, for any reason, we are unable to finance solar energy systems through tax-advantaged structures ... we may no longer be able to provide solar energy systems to new customers on an economically viable basis," SolarCity's third quarter 2013 reportsaid. "This would have a material adverse effect on our business, financial condition and results of operations." http://www.foxnews.com/politics/2014/03/03/solarcity-skyrocketing-stock-dependent-on-government-tax-giveaways/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+foxnews%2Fpolitics+%28Internal+-+Politics+-+Text%29
I see people talking about how the batteries Tesla will produce with its giant battery factory could help SolarCity, but I never see mention that perhaps SolarCity can get a big contract from Tesla for the installation of solar panels. According to the battery factory plan released by Tesla the factory will be powered in part by solar energy. Not sure how much such a contract would be for, though.
Reduced installation prices. Has been doing well lately.
I need to do more DD on SolarCity Corporation. Usually I do my DD before my calls, but in this case I wanted to see if I could take some advantage from Mr Market's confusion. Basically the forcast was lower, but the news the books would be delayed by a week or so seems to have rattled some. I don't know if the 5% down in afterhours yesterday was a reaction to the earnings report, or the delayed filings. I suspected the delayed filings and with the complexity involved, the books didn't concern me from this company...smaller ones maybe, but not this one.Overall, this could be a growth story, and it will need it to maintain the book value at this P/E. A lot of growth is factored in and in their business costs can grow as fast as profits and growth might be affected. Margins need to go higher for this to continue the momentum. SolarCity will continue to be erratic as it's peers oscillate such as FSLR's 10% hit after hours today. SolarCity, however, is not a play on waffers, but on installations. As long as government incentives remain so investors soak up the tax credits and homeowners get in at low/no entry point, this could continue to work out. Without better margins, I'm not sure this is the growth story people want, and it definitely needs institutional investors to increase their stakes. I'll take a capscall here while I do some more study.
Sales has nearly doubled! I see the future being extremly bright for those solar panel company. Esp if Tesla decides to start installing solar panels on future cars.
As good as the future might be.I cannot be behind that's under investigation.
I've been impressed with their innovative, aggressive but mutually beneficial approach to business development. And yes, the Musk-factor.
Like this company for the long term potential
Stopped me out on my last try, but I should have given it more room. I like their business model and growth with my only caveat still being a concern about the dependency on tax credits.
solar growth is the future-now.
My Recency + Exposure Theory
Simple business model, huge potential for growth, will be an earnings engine for years to come
it follows the rule investing in intelligence. i know very well the main man in the company thats all i needed to know
Deutsche says it could double
I like the business model (win-win for the company and its customers), and think it can succeed as long as it has the financial backing. I do not expect profitability for some time, but if the company can survive the earnings growth will become explosive.
Solar energy is the future, and this is far and away the best company involved in that industry. They have a genius business model, and Elon Musk has a large stake in the company.
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