On Monday, solar energy firm Vivint Solar Inc (NYSE:VSLR) reported second-quarter results showing bolstered valuation from its existing portfolio. On the heels of expansion, large deals offering sustainable growth, and strategic initiatives at play, Oppenheimer analyst Colin Rusch upgrades from a Perform to an Outperform rating on Vivint, introducing a $7 price target.
Colin Rusch increases third quarter revenue and earnings per share (EPS) projections from $34.7M and ($0.16) to $49.7 million and $0.10, respectively, compared to the Street’s estimates of $34.5 million and ($0.38). Additionally, Rusch raises 2016 revenue and GAAP EPS expectations from $102.1 million and ($0.77) to $144.8 million and $0.04, compared to the Street’s estimates of $107.4 million and ($1.61).
Rusch asserts, “With VSLR’s recent expansion of its term loan facility, we believe the company is demonstrating its ability to close large deals in a relatively short time frame. While the company will need to raise additional tax equity for 4Q:16 and 2017 deployments, we expect the company to close a facility in a timely manner considering the wide availability of tax equity.”
With new focus on cash-on-cash returns and no limits in sight for Vivint’s surges in growth, Rusch sees a great deal of economic potential for this company’s “meaningful portfolio value.” With the $313 million term loan facility deal to provide back leverage financing and higher advance rates, Rusch sings the praises of Vivint. From the analyst’s viewpoint, “We view the term loan as a sign that debt investors are taking note of VSLR’s de risking of its balance sheet—and rewarding it appropriately.”
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, four-star analyst Colin Rusch is ranked #464 out of 4,105 analysts. Rusch has a 47% success rate and realizes 9.0% in his annual returns. However, when recommending VSLR, Rusch loses 36.4% in profits on the stock.
TipRanks analytics show VSLR as a Buy. Based on 3 analysts polled by TipRanks in the last 3 months, 2 rate a Buy on Vivint Solar, while 1 maintains a Hold. The price target is $5.67, marking a 69% upside from where the stock is currently trading.
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