Behind the Wild Week for Renewable Energy Stocks
Renewable energy stocks had a crazy week as second-quarter earnings reports gave investors an idea of where there are bright spots and where there are weaknesses. Broadly, higher interest rates are starting to impact demand for residential solar projects, but the electric vehicle market is still strong, and demand for charging is up.
According to data provided by S&P Global Market Intelligence, shares of SolarEdge (NASDAQ: SEDG) fell as much as 21.7% this week and are trading near their lows for the week at 1:30 p.m. ET. EVgo (NASDAQ: EVGO) jumped as much as 35.3% and is now up 29.9% for the week. And (NASDAQ: RUN) rose 5.8% before falling late in the week and is now down 1.7%.
All three companies reported earnings, and it was really a mixed bag. On the solar side, investors were initially happy with Sunrun's revenue of $590 million and a surprise net income of $55 million, or $0.25 per share. But a closer look shows that financing costs have increased from a 5% to 6% range a year ago to around 7.25%, which means Sunrun keeps less value from each installation for itself. Net contracted earning assets are now negative if we assume an 8% discount rate, and given the trend for rates, that seems like an appropriate rate.
Source Fool.com
