Sunworks Sinks 18.3% on Wider-Than-Expected Q4 Loss

Shares of one-stop residential, agricultural, and Commercial solar integrator, Sunworks, Inc. (NASDAQ: SUNW) were down 18.3% on March 11, after the provider of high-performance solar power systems reported mixed Q4 results.

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Revenues topped expectations driven by the Solcius acquisition. On the downside, the company reported worse-than-feared Q4 loss due to ongoing supply chain issues, permitting delays, labor challenges, and other COVID-related constraints.

Mixed Q4 Numbers

The company reported an adjusted loss of $0.47 per share, which was much worse than analysts’ estimated loss of $0.17, and was significantly lower to the adjusted loss of $0.27 per share reported for the prior-year period.

However, revenues almost quadrupled to $31.7 million and marginally exceeded consensus estimates of $31.4 million. The increase in revenues reflected the inclusion of $26.1 million in residential revenue from the Solcius acquisition.

Driven by the positive contribution from Solcius’ business model as well as operational improvements throughout the business, gross margin almost doubled to 47.4% compared to 25.0% for the prior-year quarter.

CEO Comments

Looking ahead into FY2022, Sunworks CEO, Gaylon Morris, commented, “Overall, we are positioned to grow revenue by expanding our market reach in both residential and commercial markets, as well as broadening on our sales channel strategies.”

He further added, “Demand for our solutions from a wide-range of customers continues, and is accelerating, and we are well-positioned to meet this demand. Additionally, to further our strategy of improving cash flow generation and fuel growth, we intend to pursue acquisitions that develop scale, expand our geographic reach, increase our product offerings or improve our customer acquisition costs.”

Analysts Recommendation

The stock has picked up a rating from one analyst in the past three months.

Last week, Colliers Securities analyst Donovan Schafer reiterated a Buy rating on Sunworks with a price target of $5.50 (95.7% upside potential).

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