SunPower (SPWR) Stock Drops Today on Light 2015 Fiscal Guidance

NEW YORK (TheStreet) -- SunPower shares are down 5.6% to $27.51 in early market trading on Thursday after the company issued full year 2015 fiscal guidance that fell short of analysts' expectations for the period.

SunPower released a note today saying that it expects to see non-GAAP revenue between $2.4 billion and $2.6 billion for the year, with a net income between $1.10 and $1.50, and a gross margin between 21% and 23%.

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Analysts are expecting the company to generate $2.8 billion in revenue during the year and earn $1.69 per diluted share during the period.

The company also said that the guidance it released today does not include any potential financial impact if the company decides to pursue the formation of a separately traded Yieldco vehicle, a move that is currently under review by the company.

TheStreet Ratings team rates SUNPOWER CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUNPOWER CORP (SPWR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• SPWR's revenue growth trails the industry average of 18.4%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
• SUNPOWER CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SUNPOWER CORP turned its bottom line around by earning $0.57 versus -$3.01 in the prior year. This year, the market expects an improvement in earnings ($1.31 versus $0.57).
• SPWR's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.02 is sturdy.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 70.4% when compared to the same quarter one year ago, falling from $108.39 million to $32.03 million.
• The share price of SUNPOWER CORP has not done very well: it is down 7.42% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
• You can view the full analysis from the report here: SPWR Ratings Report