Sunnova Energy International Inc (NYSE:NOVA), a well-established company in the Semiconductors industry, has recently experienced a daily loss of 3.92% and a three-month change of -44.35%. These figures, combined with insights from the GF Score, indicate potential challenges ahead for the company. The GF Score, a stock performance ranking system developed by GuruFocus, evaluates key valuation aspects and has been found to be closely correlated with long-term stock performance. Sunnova Energy International Inc has been assigned a GF Score of 64 out of 100, signaling poor future outperformance potential.
Sunnova Energy International Inc is a residential solar and energy storage service provider with a market cap of $1.24 billion. The company offers various services, including operations and maintenance, monitoring, repairs and replacements, equipment upgrades, and onsite power optimization. It also provides products such as add-on battery storage, home solar protection plans, new solar battery storage, and other solar systems. Despite its sales of $673.03 million, the company faces profitability challenges with an operating margin of -22.75%.
The financial strength indicators of Sunnova Energy International Inc raise concerns about the company’s balance sheet health. The company has an interest coverage ratio of 0, positioning it worse than 0% of companies in the Semiconductors industry. This highlights potential challenges in handling interest expenses on outstanding debt. Additionally, the company’s Altman Z-Score of 0.13 suggests that it may face financial distress in the coming years. The low cash-to-debt ratio of 0.03 indicates difficulty in managing existing debt levels. Furthermore, the company’s debt-to-equity ratio of 4.58 and debt-to-Ebitda ratio of 73.58 indicate over-reliance on borrowing and vulnerability to market fluctuations.
In terms of profitability, Sunnova Energy International Inc has seen a decline in its operating margin and gross margin over the past five years. This trend indicates difficulties in converting revenue into profits. With a Piotroski F-Score of 1, the company’s financial health raises concerns in terms of profitability, liquidity, and operating efficiency.
In conclusion, based on the GF Score and the company’s financial strength, profitability, and growth metrics, Sunnova Energy International Inc seems to be in a position for potential underperformance. Investors should carefully consider these factors when making investment decisions.
– **GF Score**: The stock performance ranking system developed by GuruFocus, which evaluates companies based on five valuation aspects and has a range of 0 to 100, with 100 being the highest rank.
– **Altman Z-Score**: An indicator used to predict the likelihood of a company going bankrupt in the next two years, with a score below 1.81 indicating financial distress.
– **Debt-to-Equity Ratio**: A financial leverage ratio that indicates the degree of a company’s reliance on debt financing in relation to equity.
– **Debt-to-Ebitda Ratio**: A measure of a company’s ability to pay off its debt based on its earnings before interest, taxes, depreciation, and amortization.
– **Operating Margin**: A profitability ratio that measures the efficiency of a company’s operations by calculating the percentage of revenue that remains after deducting operating expenses.
– **Gross Margin**: A profitability ratio that calculates the percentage of revenue that remains after deducting the cost of goods sold.
– **Piotroski F-Score**: A nine-point scale that evaluates a company’s financial health based on profitability, liquidity, and operating efficiency.