Quantcast

Renesola (SOL) Rides on Organic Growth, Tariffs to Hurt


Shutterstock photo

We recently issued an updated research report on Renesola Ltd. SOL . The company delivered second-quarter 2018 adjusted loss of 2 cents per American Depositary Share (ADS), missing the Zacks Consensus Estimate for earnings of 3 cents by 166.7%. However, the bottom line improved 98.7% from the year-ago period's loss of $1.57 per ADS figure.

What's Driving the Stock?

ReneSola continues to benefit from a steady flow of contracts from both domestic and international customers. Currently, the company is expanding business in the international markets of Canada, Poland, Hungary, France, Spain and Turkey. Further, it is actively pursuing opportunities in new markets, including South Korea and India.

Notably, the United States continues to be a large and robust market for ReneSola. The company has 285.5 megawatt (MW) shovel-ready stage projects in the United States, of which 24 MW are under construction and are likely to be connected to the grid in the third quarter of 2018. ReneSola boasts a global pipeline of approximately 1.51 gigawatt (GW) of projects in various stages.

On the domestic front, ReneSola owned over 226.5 MW of rooftop projects in operation in China. Moreover, the company currently has over 134 MW of rooftop projects under construction and anticipates owning approximately 350-400 MW of rooftop projects in China by the end of 2018. ReneSola's China distributed generation (DG) projects is expected to drive the performance on account of rapid expansion.

Further, the company closed an equity investment agreement of approximately $30.2 million in May 2018 to acquire 40.13% of ReneSola's China DG Holdco. Notably, the Zacks Consensus Estimate for the company's 2018 bottom line moved 61.5% north to 21 cents per share, year over year growth.

However, a significant portion of the company's revenues is denominated in foreign currencies and hence the company faces foreign currency exchange risk. As ReneSola expands its distribution network internationally, its exposure to currency exchange rate fluctuations rises. With the U.S. administration imposing a tariff of 30% on the import of solar panels and modules, ReneSola's revenue growth prospects from the nation seems bleak.

Renesola Ltd. Price

Renesola Ltd. Price | Renesola Ltd. Quote

Zacks Rank & Stocks to Consider

Renesola currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same sector include Denbury Resources Inc. DNR , Northern Oil and Gas, Inc. NOG and Viper Energy Partners LP VNOM , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Denbury Resources delivered an average positive earnings surprise of 162.86% in the last four quarters. The Zacks Consensus Estimate for current-year earnings has been revised 20% upward to 48 cents per share over the past 60 days.

Northern Oil and Gas delivered an average positive earnings surprise of 138.54% in the last four quarters. The Zacks Consensus Estimate for current-year earnings has been revised 34.2% upward to 55 cents per share over the past 60 days.

Viper Energy Partners delivered an average positive earnings surprise of 6.71% in the last four quarters. The Zacks Consensus Estimate for current-year earnings has been revised 72.8% upward to $2.54 per unit over the past 60 days.

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Denbury Resources Inc. (DNR): Free Stock Analysis Report

Viper Energy Partners LP (VNOM): Free Stock Analysis Report

Northern Oil and Gas, Inc. (NOG): Free Stock Analysis Report

Renesola Ltd. (SOL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: DNR , VNOM , NOG , SOL



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?