Why SolarCity's Stock Went Dark

Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of solar installer SolarCity dropped 11% today after the company released first-quarter earnings.

So what: Revenue was up 21% from a year ago to $29.99 million, ahead of Wall Street's $29.1 million estimate. The problem is that the company's net loss was $31 million, or $0.41 per share, and analysts were only expecting a $0.32 loss per share. Â


Now what: It's going to be some time before SolarCity reports a profit so the higher than expected loss isn't a huge surprise. The company still expects to install 250 MW of solar this year and expects lease revenue to be $16 million-$18 million in the second quarter. This is recurring revenue; it's growth in leases we should be worried about. I don't think this is a reason to panic but I'd be cautious getting into SolarCity because operating expenses are growing much faster than revenue or installations right now.

Interested in more info on SolarCity? Add it to your watchlist by clicking here.

The article Why SolarCity's Stock Went Dark originally appeared on Fool.com.

Motley Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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