SolarCity Corporation (NASDAQ: SCTY)
SolarCity Corporation (SCTY) the biggest rooftop solar company yesterday announced fourth quarter and fiscal year 2015 financial results. SCTY reported a fourth quarter loss of $2.37 per share which was better than analyst expectations of a loss of $2.59 per share. SCTY reported fourth quarter revenues of $115.48 million which beat analyst expectations of $105.62 million. However SCTY projected a 2016 first quarter loss between $2.55 per share and $2.65 per share which fell short of analyst expectations of a loss of $2.36 per share. Despite the positive fourth quarter numbers investors seemed to be more concerned with the disappointing 2016 guidance numbers as the stock gapped down 26%.
SolarCity Corporation CEO’s Comments
“We are not happy with these results, and recognize our need to revamp our guidance methodology to avoid any potential shortfalls going forward,” Chief Executive Lyndon Rive wrote in a letter to shareholders. Wall Street Journal
SCTY Technical Analysis
SCTY gapped down in price yesterday to $19.39, down from the prior day’s close of $26.35, which is a 26% decrease in price. Taking a look at the daily chart we can see that the last time SCTY traded below this price level you have to go all the way back to March 31st, 2013 when it traded at $18.23. Taking a closer look at the daily chart we can see that SCTY has been on an overall decline dating back to December 17th when it traded at $57.26. SCTY has gapped down and is now trading at new 52 week lows on news of their weak 2016 guidance numbers. SCTY has a float of 56.19 million shares and is trading over 7.5 times the normal daily trading volume. SCTY did reach pre market lows of $17.50, but bounced back $1.89 at the open, or equivalent to 11%. For trading purposes, my entry point short would have been $19.30 looking for move down to $18. My stop loss would have been $19.50, fearing anything above that and the stock would start to fill in the gap down.
SolarCity Corporation designs, manufactures, installs, maintains, monitors, leases, and sells solar energy systems to residential, commercial, government, and other customers in the United States. It offers solar energy systems; solar lease and power purchase agreement finance products; mounting hardware for photovoltaic panels; and related software, as well as develops a proprietary battery management system, which is designed to enable remote, bidirectional control of distributed energy storage that can provide benefits to customers, utilities, and grid operators. The company also sells electricity generated by solar energy systems to customers. It offers its products and services through direct outside sales force; door-to-door sales force; call centers; channel partner network; and robust customer referral program. The company was founded in 2006 and is headquartered in San Mateo, California. Yahoo Finance