The next hot solar IPO is here now that Blackstone Group is launching the IPO of Vivint Solar (VSLR) on Wednesday. To prepare investors interested in the IPO, I've outlined who Vivint Solar is and what you'll be getting in the IPO.
Source: Vivint Solar.
Who is Vivint Solar?
Vivint Solar is a residential solar installer and financier that primarily sells systems through solar leases. The company is No. 2 in residential solar market share, behind the U.S.'s largest SolarCity (SCTY.DL) and ahead of installers like SunPower (SPWR -0.65%), Sungevity, and Verengo.
Offering direct sales, usually door-to-door, differentiates the company, and standardization of components helps lower costs on its installations. The sales strategy has led to a highly concentrated market share in small regions in the Northeast, such as Boston.
As of June 30, 2014, the company had installed 21,921 solar systems totaling 129.7 MW, with $647.5 million in estimated contracted payments remaining, and $246.2 million in retained value under contract.
Details of the IPO
Below are the key metrics of the IPO.
|
Ticker Symbol | |
|---|---|
|
Shares Offered to the Public |
20,600,000 |
|
Potential Overallotment to The Blackstone Group |
3,090,000 |
|
Price per Share |
$16 |
|
Maximum Offer Proceeds to Vivint Solar |
$329,600,000 |
|
Total Shares Outstanding Post-IPO |
105,303,122 plus any overallotment |
|
Market Cap |
$1.68 billion |
Source: Vivint Solar SEC filings.
It's important to note that Blackstone Group will remain a large shareholder even after this offering, although it will likely reduce its role over time.
How Vivint Solar stacks up to competitors
The table below outlines how Vivint Solar stacks up to existing solar companies on the stock market. Each company has a slightly different business model, so these numbers should be taken in the context of their business, but they give a feel for revenue, earnings, and MW deployed.
|
First Solar |
SolarCity |
SunPower |
Vivint Solar | |
|---|---|---|---|---|
|
Market Cap |
$6.59 billion | $5.52 billion | $4.44 billion | $1.68 billion |
|
MW Deployed 1H '14 |
888.2 MW |
153 MW |
638 MW |
129.7 MW |
|
Revenue 1H '14 |
$1.49 billion |
$124.9 million |
$1.20 billion |
$10.1 million |
|
Net Income 1H '14 |
$116.5 million |
($71.7 million) |
$79.1 million |
($76.2 million) |
|
Contracted Retained Value |
n/a |
$1.25 billion |
unknown |
$246.2 million |
Source: Yahoo! Finance, company earnings releases, and SEC filings.
One key number to watch will be growth for Vivint Solar. The company is still new in the solar industry, but it grew installations an astounding 231% in the first half of this year. Growing anywhere near that rate into the future could bring it to the same scale as SolarCity atop the residential solar industry, creating a great growth opportunity for investors.
At the very least, this is a solar company worth watching, and we'll be covering Vivint Solar along with the rest of the industry on Fool.com.
