Sunlight Financial Holdings Inc. (SUNL) reported strong debut second-quarter earnings results since its NYSE listing in July, driven by robust funded loan volume growth. Notably, the company completed its business combination with Spartan Acquisition Corp. II, a publicly traded special purpose acquisition company last month.
SUNL is a technology-enabled point-of-sale financing company that partners with contractors to offer homeowners innovative, affordable loans for the installation of residential solar systems.
Total revenues jumped 162% year-over-year to $26.9 million compared to $10.3 million in the prior-year quarter. (See Sunlight Financial stock charts on TipRanks)
The increase in revenues reflected a surge in total funded loans, which tripled to $666 million from $222 million a year ago. Furthermore, the company’s contractor network grew 77%, bringing the total active contractor base to nearly 1,400.
In other positive news, the company reported net income of $5.2 million compared to a net loss of $1.2 million in the prior-year quarter.
Sunlight CEO Matt Potere commented, “Sunlight is well-positioned to pursue its growth strategy as a public company, continuing to provide frictionless financing and innovative products to homeowners to support the transition to a clean energy future.”
Sunlight Financial Revises FY2021 Outlook
Based on strong Q2 loan growth, the company revised its guidance for FY2021. The company now forecasts revenue to grow 68% year-over-year to between $113 and $121 million.
Markedly, total funded loans are forecast to grow 84% year-over-year to a range of $2.6 – $2.8 billion.
Furthermore, adjusted EBITDA is expected to be in the range of $46 – $51 million, representing 102% year-over-year growth, with a projected adjusted EBITDA margin range of 38% – 42%.
Citigroup analyst Arren Cyganovich recently initiated coverage of Sunlight Financial with a Buy rating and a price target of $13 (108.3% upside potential).
Cyganovich said, “Our positive view of Sunlight Financial stems from a combination of increased underlying demand for residential solar products, an increased propensity to fund these projects with loans (SUNL’s business), and higher average loans as more consumers add on battery storage to their projects.”
The analyst further added, “With strong expected growth in loan funding over the foreseeable future, we believe that SUNL will be able to expand its profitability and gain market share within residential solar financial.”
Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Sunlight Financial price target of $14.33 implies 129.7% upside potential to current levels.
SUNL scores a 7 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations.
Related News:
Forma Therapeutics Holdings Shares Fall 4.5% on Q2 Miss
HSBC Holdings to Snap up Axa Singapore for $575 million – Report
Badger Meter Bumps up Quarterly Dividend by 11%
