Baird’s research note on SolarCity Corp stock after 2Q earnings report

Business Finance News reviews Baird’s research note on SolarCity Corp stock after 2Q earnings report.

SolarCity Corp. (NASDAQ:SCTY) published second quarter earnings report for fiscal year 2015 on July 29, beating the Street massively on revenues by $12.6 million, recording $102.8 million; in turn registering colossal growth of well over 67%. Despite the beat, shares for SolarCity are treading on a downwards trajectory, falling by 0.93% as at 11:21 AM EDT.

However, it is interesting to note that regardless of the falling share price, Baird analyst Ben Kallo has increased the 12-month price target estimate to $73 from the previous estimate of $71. We believe that the stance by Mr. Kallo is explained, as falling stock price presents an excellent Buy opportunity, as future growth is anticipated with consumer bookings expected to increase.

In the research note, we notice that SolarCity bookings have increased by 81% Year-over-Year (YoY) in the second quarter; we believe this trend to carry on in the future as the masses are educated on the upside of using renewable energy; this coupled with increased investment will surely take the stock further.

Apart from what Mr. Kallo believes to be traction points for SolarCity’s future growth, we believe that financing facility available to its customers is a great selling point to attract a greater consumer base.

Stock Price Movement

SolarCity stock is currently trading at $57.78, down by 0.47% as at 11:48 AM EDT, the stock opened at $59.76. The 12-month consensus price target of $84 per share, which registers a massive potential upside of 45.3% on the current share price, further supports our claim of lower share price projecting an excellent buy opportunity.

Analysts Rating

We notice the same bullish stance as analysts on the Street are leaning greatly towards a Buy rating; 12 out of 15 analysts polled by Bloomberg suggest a Buy rating, whereas just two analysts rate the stock as a Hold and merely one analyst tags the stock as a Sell.