SunPower Corporation (SPWR), First Solar, Inc. (FSLR): The Market Still Doesn’t Understand Solar

What to look for during earnings season
SunPower is in a unique position by owning module plants, building utility-scale projects, and being involved in leasing. For its competitors, there are easier keys to watch during this earnings season.

When First Solar, Inc. (NASDAQ:FSLR) announces earnings next week look for cost trajectory and where the company’s backlog stands. The systems business is basically all of First Solar, Inc. (NASDAQ:FSLR)’s business now, and the momentum of signing projects has slowed, so that fact will be key for the stock.

At SolarCity , the momentum of installations will be key and so will margins. SolarCity is spending a lot of money upfront to grow its business — once it reaches a critical mass the profits from each installation will begin rolling in and won’t stop for 20 years.

These factors will be more important than either revenue or earnings for First Solar, Inc. (NASDAQ:FSLR) and SolarCity in the short term.

The article The Market Still Doesn’t Understand Solar originally appeared on Fool.com and is written by Travis Hoium.

Fool contributor Travis Hoium manages an account that owns shares of SunPower and personally owns shares and has the following options: long January 2015 $5 calls on SunPower, long January 2015 $7 calls on SunPower, long January 2015 $15 calls on SunPower, long January 2015 $25 calls on SunPower, and long January 2015 $40 calls on SunPower. The Motley Fool has no position in any of the stocks mentioned.

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