What happened
Shares of Array Technologies (ARRY 0.97%) fell as much as 15% in trading Tuesday after the solar industry supplier announced a new customer order. At 1:40 p.m. EST, shares had recovered slightly but were still down 9.5% for the day.
So what
Today's announcement was a 1.4 gigawatt (GW) purchase agreement from Lightsource bp's solar development arm. The order is for the single-axis tracker known as DuraTrack HZ v3 with plant optimizing SmarTrack technology.
Image source: Getty Images.
Management compared this deal with the $100 million, 1.5 GW order Lightsource made in December. Revenue for this agreement wasn't announced, but it's fair to assume that the economics are similar on a per-watt basis.
Now what
So, why is the stock down today? Management had teased "a large deal with a very strategic customer" during its earnings call last week, and this is likely that deal. Investors may be selling this solar energy stock on the news or the agreement may be smaller than expected.
Given the fact that earnings were well received last week, despite Array Technologies losing $7.2 million, or $0.06 per share, this could just be a natural pullback in the stock. There are still outstanding questions about how quickly the utility-scale solar industry will grow, and that could impact the stock's upside. It could be a volatile ride, but long term the solar industry does have tailwinds behind it, and Array Technologies is one of the companies that should benefit.
