2. Sunnova Energy International Inc. (NYSE:NOVA)
Number of Hedge Fund Holders: 19
Sunnova Energy International Inc. (NYSE:NOVA) is an energy services company specializing in residential solar and energy storage solutions. Collaborating with local dealers and contractors, NOVA offers services such as operations and maintenance, monitoring, repairs and replacements, equipment upgrades, and onsite power optimization. Their product portfolio includes add-on battery storage, home solar protection plans, new solar battery storage, and various other solar systems.
The recent Q4 2024 presented significant challenges for Sunnova Energy International Inc. (NYSE:NOVA), marked by peer distress, high interest rates, and regulatory uncertainties that made both consumers and capital providers more cautious. The company faced slowdowns in tax equity flow, which impacted capital deployment and resulted in 2024 cash generation falling below expectations. Despite these challenges, NOVA achieved notable operational improvements, including a 24% reduction in net service expense per customer over two years, while reducing total work orders by 12% and growing their cumulative solar customer base by over 70%.
Sunnova Energy International Inc. (NYSE:NOVA) has also taken strategic steps to strengthen its position, including prioritizing margin over growth, focusing on high-margin energy services, and implementing price increases to offset higher capital costs. Significant cost-cutting measures were implemented, including a 15% headcount reduction expected to contribute approximately $35 million towards total estimated annual cash savings of $70 million. In terms of financing, NOVA secured substantial asset-level funding in 2024, including $1.8 billion in solar asset securitizations and $1.3 billion in tax equity, marking the first year without issuing corporate level capital. Looking forward, the company is focusing on addressing its late 2026 corporate debt maturities by mid-2025, while maintaining its commitment to customer service quality. In the last six months, at least two insiders bought significant amounts of the company’s stock, which signals that NOVA’s struggles may be in the rear-view mirror.
