ReneSola (SOL) stock soared in the recent trading session: here’s why

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ReneSola (SOL) stock recently traded at $11.84 which is a 20.82% upward movement. The ReneSola stock previously closed at $9.80.

The recent positive movement in the stock was adjacent to the release of the financial result of the fourth quarter of 2020.

Glimpse into the leading Global Solar Power Company

ReneSola (NYSE: SOL) is a Solar based company specifically a developer and operator of solar projects. The company’s portfolio consists of the development of solar power projects, construction management, and project financing services. ReneSola is a global company and has deployed professional teams across 10 countries.

With solar power projects growing around the world, ReneSola (SOL) has effectively strategized the expansion of its operations in regions where this phenomenon is on the rise. The regions specifically consist of US and European markets; New York, Minnesota, Poland and Hungary.

ReneSola (SOL) misses revenue target and loses investor confidence

Even with the market-leading positions in several geographies, SOL stock does not show the effectiveness of these positions on its balance sheet. ReneSola(SOL) missed on its revenue target in the Q4 2020. The earnings however were breakeven for the American Depositary Share.

Zacks Consensus Estimate of revenue earning for Q4 2020 was $25 million while SOL stock was able to generate $16.8 million and missed the estimate by 31.8%. Furthermore, ReneSola’s own projection for the quarter was around $23-$25 million.

As for the Full-Year report, the revenues were reported at $73.9 million while the SOL’s guidance had an expectation of $80-$100 million. This FY 2020 revenue is weaker in comparison to FY 2019’s $119.1 million.

Cash Equivalent Finances

As of the end of the year 2020, ReneSola (SOL) had cash and cash equivalent of $40.6 million. This is a 59% increase than that of $24.3 million on 31st Dec, 2019. Let’s look at the operational activities of the SOL stock.

Operational activities of ReneSola (SOL)

Operating expenses were drastically down to $1.5 million – a 92.6% down from the $20.4 million witnessed on the Q4 on 2019. ReneSola generated a gross margin of 14.7% in the fourth quarter of 2020 as compared to 26.9% of the year-ago quarter.

Income generated through operational activities in the fourth quarter totaled at $0.96 million. However, in the last year in the same quarter in operated at a loss of $13.3 million.

Recent Solar Projects completed

The SOL stock has 828 MW of projects completed in the year 2020. While the number of late-stage projects totaled at 1 GW. The rooftop projects operation in the year 2020 comprised of 173 MW out of which 149.2 are present in China and 24.1 are in the United States.

SOL stock’s estimate and guidance for the year 2021

The SOL stock has also given quarterly and full-year guidance for the year 2021. For the first quarter, ReneSola (SOL) expects revenue of $18-$20 million while the ZCE is projected at $24.6 million. Similarly, for the Full Year 2021, the company-projection is in the range of $90-$100 million while the ZCE has pegged the revenues at $161.4 million which is again much higher than the SOL stock projection.

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