Canaccord analysts are weighing in on the solar leasing giant SolarCity Corp (NASDAQ:SCTY) and software giant Oracle Corporation (NYSE:ORCL). The analysts reflect on the disappointing earnings report from SolarCity and shed some light on Oracle’s analyst day.
Shares of SolarCity fell more than 20% after the company reported a wider than expected third-quarter loss, and offered a fourth-quarter outlook that fell short of analyst forecasts. In reaction, Canaccord analyst Jonathan Dorsheimer reduced his price target on SolarCity to $48 (from $76), while reiterating a Buy rating on the stock.
Dorsheimer commented: “As we approach the ITC cut, SolarCity has implemented (or has been forced to implement) a reduced growth strategy to viably scale costs and become cash flow positive in the near term. To put it bluntly, we see more near-term negative catalysts than positive. That being said, we believe these risks have been sufficiently discounted and we maintain our positive stance on SolarCity’s brand, channel, scale, and first mover advantage, while fully recognizing the slowing of total DG deployment growth given impending regulation step-down, other regulatory headwinds as well as the further commoditization of PV systems. We maintain our BUY on valuation as bears have overly discounted economic value creation, in our opinion. We emphasize our understanding of looming risks and reduce our PT to $48.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jonathan Dorsheimer has a total average return of -4.7% and a 37.9% success rate. Dorsheimer has a -30.6% average return when recommending SCTY, and is ranked #3552 out of 3808 analysts.
Out of the 8 analysts polled by TipRanks in the last 3 months, 5 rate SolarCity stock a Buy, 2 rate the stock a Hold and 1 recommends a Sell. With a return potential of 141%, the stock’s consensus target price stands at $70.80.
In a research report published Friday, Canaccord analyst Richard Davis reiterated a Buy rating on shares of Oracle, with a price target of $44, after the company hosted its Financial Analyst Meeting yesterday at the Oracle OpenWorld conference in San Francisco.
Davis wrote, “Oracle provided helpful, but still high-level discussions of its logical strategy. However, as we detailed in our preview note earlier this week, without some benchmarks against which investors can assess the firm’s execution, the otherwise “ugly” headline results will make ORCL share price advances a bit of an uphill battle. We have kept our BUY rating for the moment, but if the stock rallies into the $40’s we will consider a downgrade to HOLD.”
“While we have been cautious on software stocks in this earnings season, we remain quite optimistic about the fundamentals of the software industry. Velocity of change is increasing, regulations are increasing, and everyone expects mobile access. The result: software is consuming the world. Broadly speaking, this is good news for software companies because they are subsuming large swaths of the technology stack. As a full stack vendor, Oracle is a beneficiary of this trend,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Richard Davis has a total average return of 4.7% and a 55% success rate. Davis has a 2.2% average return when recommending ORCL, and is ranked #506 out of 3808 analysts.
Out of the 29 analysts polled by TipRanks, 19 rate Oracle stock a Buy, 8 rate the stock a Hold and 2 recommend a Sell. With a return potential of 15%, the stock’s consensus target price stands at $44.60.