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SunPower (SPWR) to Report Q3 Earnings: What's in Store?

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SunPower Corporation (SPWR - Free Report) is slated to report third-quarter 2021 results on Nov 3, after the closing bell.

In the last reported quarter, the company delivered an earnings surprise of 100.00%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 53.33%.

Factors to Note

During the last few quarters, the company has been witnessing a growing TAM (Total Addressable Market) in the residential space and ramp up in demand for solar and storage solutions, which has been leading to strong residential bookings. Also, positive policy tailwinds have been benefiting SunPower’s residential, commercial and industrial business lately. This trend is likely to have continued in the third quarter, thus may get reflected in the quarterly results.

Also, during the first-quarter earnings call, SunPower stated that it anticipates solid growth of SunVault in the second half of 2021, with the company having resumed the full rollout of the product to additional dealers beginning in June. This is likely to have positively impacted the company’s performance in the to-be-reported quarter.

In the beginning of the third quarter, SunPower and Wallbox teamed up to integrate solar and home electric vehicle charging. The collaboration may have led to expansion of the company’s addressable market. This, in turn, might have favored its performance in the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $325.5 million, suggesting growth of 18.5% from the year-ago reported figure.

On its second-quarter earnings call, the company announced that it expects to witness margin growth, particularly in the residential business, driven by solid bookings and volume expansion across all business scope. This might have provided a boost to the to-be-reported quarter’s performance.

Thecost reduction programs implemented by the company are likely to have contributed to the third-quarter performance. The strategic investments taken by the company in its storage, energy services and adjacent technology initiatives may get reflected in the third-quarter bottom line.

The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at 2 cents per share,suggesting animprovement of 150% from the year-ago quarter.

SunPower Corporation Price and EPS Surprise

SunPower Corporation Price and EPS Surprise

SunPower Corporation price-eps-surprise | SunPower Corporation Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for SunPower this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here.

Earnings ESP:The company’s Earnings ESP is -261.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SunPower currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three solar players you may want to consider, as these have the right combination of elements to post an earnings beat this season:

FTC Solar, Inc (FTCI - Free Report) has an Earnings ESP of +6.57% and a Zacks Rank #3.

Array Technologies(ARRY - Free Report) has an Earnings ESP of +146.67% and a Zacks Rank #3.

Sunrun (RUN - Free Report) has an Earnings ESP of +504.92% and a Zacks Rank #2.

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