It was a dark day for solar stock SunPower (NASDAQ:SPWR) as it revealed that its previous financial statements were, essentially, rife with errors. The extent of the errors might be the most mind-boggling part of all, and investors frantically fled for the door, taking just over 18% of SunPower’s market cap along with them.
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At last report, SunPower is trading at a level not seen in the last three and a half years, thanks to today’s enormous drop that largely only got worse as the day went on. SunPower noted that it would not only need to restate its financial results for the second quarter of 2023 but also the first quarter of 2023. And for Fiscal Year 2022 as well.
Apparently, according to reports, there were “errors” in the reporting that “…may impact covenants on some of its borrowings.” SunPower is currently in talks with lenders about the state of said borrowings and is looking for terms to address its credit agreements.
That’s bad enough, but a look at the rest of the story for SunPower won’t win it much extra support, either. Reports note that company earnings and investor returns have actually been on the decline for those last three years anyway. The share price is down 55% just over the last three months. Over the last year, it’s down 68%.
Yet, in spite of this, revenue is actually up over the last three years, which is enough to have some scratching heads. Though admittedly, given the state of the solar sector overall, which has faced trouble from consumers pulling in their wallets against soaring inflation, SunPower’s troubles are not limited to itself.
Is SunPower Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SPWR stock based on two Buys, 10 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPWR price target of $7.29 per share implies 81.8% upside potential.
