Long-established in the Semiconductors industry, Sunnova Energy International Inc (NOVA, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 6.3%, juxtaposed with a three-month change of -34.54%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Sunnova Energy International Inc.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 2/10
- Profitability rank: 3/10
- Growth rank: 6/10
- GF Value rank: 2/10
- Momentum rank: 5/10
Based on the above method, GuruFocus assigned Sunnova Energy International Inc the GF Score of 59 out of 100, which signals poor future outperformance potential.
Snapshot of Sunnova Energy International Inc's Business
Sunnova Energy International Inc is a residential solar and energy storage service provider company with a market cap of $1.47 billion. It offers services such as operations and maintenance, monitoring, repairs and replacements, equipment upgrades, and onsite power optimization. The products and services offered by the group include Add-on battery storage, Home solar protection plans, New solar battery storage, and various other solar systems. However, with sales of $673.03 million and an operating margin of -22.75%, the company's financial health appears concerning.
Financial Strength Breakdown
Sunnova Energy International Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The company's low cash-to-debt ratio at 0.03 indicates a struggle in handling existing debt levels. The company's debt-to-equity ratio is 4.58, which is worse than 99.24% of 788 companies in the Semiconductors industry. A high debt-to-equity ratio suggests over-reliance on borrowing and vulnerability to market fluctuations.
Profitability Breakdown
Sunnova Energy International Inc's low Profitability rank can also raise warning signals. The company's Operating Margin has declined over the past five years ((-14,610.00%)), as shown by the following data: 2018: -13.15; 2019: -16.93; 2020: -22.25; 2021: -22.71; 2022: -14.62; .
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While Sunnova Energy International Inc has a strong reputation in the Semiconductors industry, its recent financial performance and GF Score suggest that it may struggle to maintain its historical performance. Therefore, investors should exercise caution when considering this stock.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
