It has been about a month since the last earnings report for SunPower (SPWR Quick QuoteSPWR - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is SunPower due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

SunPower Q3 Earnings Miss Estimates, Sales Down Y/Y

SunPower Corporation reported a third-quarter 2023 adjusted loss of 12 cents per share against earnings of 8 cents in the prior-year period. The loss also came in wider than the Zacks Consensus Estimate of a loss of a penny per share.

Including one-time adjustments, the company reported a GAAP loss of 17 cents per share against the prior-year quarter’s earnings of 73 cents.

Revenues

During the quarter under review, SunPower’s adjusted revenues totaled $432.2 million, while GAAP revenues amounted to $432 million. The top-line estimate was pegged at $430 million. The adjusted top line deteriorated 9.3% from the year-ago quarter’s figure of $476.3 million.

Operating Results

Total operating expenses in the quarter dropped 1.1% year over year to $94.5 million. Lower SG&A and research and development expenses led to the downside.

The company’s gross profit declined 37.2% to $66.4 million rom $105.7 million in the third quarter of 2022.

Its interest expense surged a solid 77% to $6.60 million.

Financial Position

SunPower had cash and cash equivalents of $103.7 million as of Oct 1, 2023, compared with $377 million as of Jan 1, 2023.

The long-term debt totaled $302.6 million as of Oct 1, 2023, compared with $308 million as of Jan 1, 2023.

The company’s cash outflow from operating activities totaled $107.2 million during the first nine months of 2023 compared with $170 million in the year-ago period.

2023 Outlook

SunPower updated its 2023 guidance. For 2023, SPWR now expects negative adjusted EBITDA in the band of $25-$35 million against the previously guided range of $55-$75 million for adjusted EBITDA.

Meanwhile, residential customers are projected in the band of 70,000-80,000, down from the previously estimated range of 70,000-90,000.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -12100% due to these changes.

VGM Scores

At this time, SunPower has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise SunPower has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

SunPower is part of the Zacks Solar industry. Over the past month, Enphase Energy (ENPH Quick QuoteENPH - Free Report) , a stock from the same industry, has gained 28%. The company reported its results for the quarter ended September 2023 more than a month ago.

Enphase Energy reported revenues of $551.08 million in the last reported quarter, representing a year-over-year change of -13.2%. EPS of $1.02 for the same period compares with $1.25 a year ago.

Enphase Energy is expected to post earnings of $0.55 per share for the current quarter, representing a year-over-year change of -63.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -16.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Enphase Energy. Also, the stock has a VGM Score of C.